Academic Peer Effects with Different Group Assignment Policies: Residential Tracking versus Random Assignment

• Departmental Seminar

Date and Location

Monday, January 28, 2013, 10:30 AM - 12:00 PM
3001 Plant and Environmental Sciences

Abstract

A growing literature in the economics of education emphasizes the importance of peer effects in determining students’ academic outcomes. Most of the existing empirical literature uses natural experiments in which students are randomly assigned to peer groups to identify the causal effect of peer characteristics. However, their results provide no direct evidence regarding the policy-relevant problem of which group assignment policies produce better or worse aggregate outcomes. I address this gap in the literature by contrasting the distribution of test scores under two common policies for assigning students to residential peer groups: tracking and random assignment. I find that tracking reduces mean GPA by approximately 0.12 standard deviations (one quarter of the black-white GPA gap) relative to random assignment. This is driven by very large negative effects on the lower tail of the GPA distribution (up to 0.5 standard deviations) and near-zero, insignificant effects on the upper tail. These results are robust to a variety of strategies to control for selection on observed and unobserved characteristics. I explore whether this result could have been predicted using random variation in dormitory composition generated under the random assignment policy. I estimate a flexible education production function and show that the parameters do not predict the magnitude of the treatment effect of tracking. This may reflect out of sample prediction problems or students’ behavioral responses to the changed group assignment policy.