Does peer ability affect student achievement?

TLDR

Empirical studies of peer effects on student achievement face challenges in disentangling peer influence from confounding factors. The study argues that omitted and mismeasured variables are likely more critical than simultaneous determination in assessing peer effects. The authors control for confounding by eliminating student and school‑by‑grade fixed effects and observable family and school characteristics, and they account for reciprocal peer interactions and the use of past achievement as a peer quality measure. Results show that higher peer achievement positively influences achievement growth for all students, while the overall variance in achievement has no systematic effect. © 2003 John Wiley & Sons, Ltd.

Abstract

Abstract Empirical analysis of peer effects on student achievement has been open to question because of the difficulties of separating peer effects from other confounding influences. While most econometric attention has been directed at issues of simultaneous determination of peer interactions, we argue that issues of omitted and mismeasured variables are likely to be more important. We control for the most important determinants of achievement that will confound peer estimates by removing student and school‐by‐grade fixed effects in addition to observable family and school characteristics. The analysis also addresses the reciprocal nature of peer interactions and the interpretation of estimates based upon models using past achievement as the measure of peer group quality. The results indicate that peer achievement has a positive effect on achievement growth. Moreover, students throughout the school test score distribution appear to benefit from higher achieving schoolmates. On the other hand, the variance in achievement appears to have no systematic effect. Copyright © 2003 John Wiley & Sons, Ltd.