A Model of Peer Effects in School

30 Pages Posted: 24 Mar 2015 Last revised: 1 May 2021

See all articles by Ugo Bolletta

Ugo Bolletta

University of Antwerp - Department of Economics

Date Written: April 30, 2021

Abstract

Designing interventions aimed at fostering peer effects in schools requires knowledge of how individuals endogenously sort into groups. We propose a theoretical model where agents form groups endogenously and their outcomes are affected accordingly. Using a popular payoff structure, we show that equilibrium outcomes are consistent with the linear-in-means model used to empirically study peer effects, and we characterize the set of stable networks. Further analytical results show that the model can explain the empirical results of Carrell et al. (2013). In particular, segregation in the classroom harms the transmission of peer effects that would benefit the lower achieving students. The presence of weak ties could counteract this outcome.

Keywords: endogenous networks, peer effects, segregation, educational policy, homophily

JEL Classification: D83, D85, L14, Z13

Suggested Citation

Bolletta, Ugo, A Model of Peer Effects in School (April 30, 2021). Available at SSRN: https://ssrn.com/abstract=2581373 or http://dx.doi.org/10.2139/ssrn.2581373

Ugo Bolletta (Contact Author)

University of Antwerp - Department of Economics ( email )

Belgium

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