Identifying Peer Effects on Student Academic Effort
33 Pages Posted: 26 May 2023 Last revised: 28 Sep 2023
Date Written: September 20, 2023
Peer influences on students' academic effort are often studied using GPA as a proxy variable for the effort when the latter is unobserved. We present an alternative method that does not require this approximation. Our identification strategy distinguishes unobserved shocks exerted on GPA without influencing the effort from unobserved students' preference shocks. We show that our estimate could be significantly different from the classical estimate (where the effort is approximated) if the network includes isolated students. Applying our approach to Add Health data shows that the peer effect estimate using a proxy for the effort is 1.6 times lower.
Keywords: Social networks, Peer effects, Academic achievement, Nonparametric methods
JEL Classification: C14, C31, J24
Suggested Citation: Suggested Citation