On the mechanisms of ability peer effects
Melbourne Institute Working Paper No. 19/20
Date: October 2020
Studying with higher ability peers increases student performance, yet we have little idea why. We exploit random assignment of students to classrooms and find positive peer effects on test scores. With very rich data on seventeen potential mechanisms, we then estimate how peer effects on attitudes, parents, etc. could drive these results. Higher-achieving peers reduce student effort, increase student university aspirations, increase parental time investments, and have precise null effects elsewhere. None of these mechanisms, however, explain our peer effect on test scores. Our findings question the prevailing empirical approach to understanding the mechanisms underlying academic peer effects.