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Ordinal Rank and Peer Composition: Two Sides of the Same Coin?

Author

Listed:
  • Bertoni, Marco

    (University of Padova)

  • Nistico, Roberto

    (University of Naples Federico II)

Abstract
We use data from two experiments that randomly assign students to groups to show that, so long as ordinal rank has a causal effect on educational achievement, estimates of the effects of peer ability composition obtained from models that omit rank are downward biased. This finding holds both in the standard linear-in-means model as well as in models that allow for non-linear and heterogeneous peer effects, and contributes to explain why previous studies have detected only modest effects of peer ability on achievement. We also illustrate how this finding helps understand the mechanisms behind the effects of ability tracking policies.

Suggested Citation

  • Bertoni, Marco & Nistico, Roberto, 2019. "Ordinal Rank and Peer Composition: Two Sides of the Same Coin?," IZA Discussion Papers 12789, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12789
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    File URL: https://docs.iza.org/dp12789.pdf
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    References listed on IDEAS

    as
    1. Thomas Cornelissen & Christian Dustmann & Uta Schönberg, 2017. "Peer Effects in the Workplace," American Economic Review, American Economic Association, vol. 107(2), pages 425-456, February.
    2. Jeffrey T. Denning & Richard Murphy & Felix Weinhardt, 2023. "Class Rank and Long-Run Outcomes," The Review of Economics and Statistics, MIT Press, vol. 105(6), pages 1426-1441, November.
    3. Benjamin Elsner & Ingo E Isphording & Ulf Zölitz, 2021. "Achievement Rank Affects Performance and Major Choices in College [Gender, competitiveness, and socialization at a young age: evidence from a matrilineal and a patriarchal society]," The Economic Journal, Royal Economic Society, vol. 131(640), pages 3182-3206.
    4. Richard Murphy & Felix Weinhardt, 2020. "Top of the Class: The Importance of Ordinal Rank," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(6), pages 2777-2826.
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    12. Adam S. Booij & Edwin Leuven & Hessel Oosterbeek, 2017. "Ability Peer Effects in University: Evidence from a Randomized Experiment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(2), pages 547-578.
    13. David S. Lyle, 2009. "The Effects of Peer Group Heterogeneity on the Production of Human Capital at West Point," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 69-84, October.
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    18. Michela Tincani, 2017. "Heterogeneous Peer Effects and Rank Concerns: Theory and Evidence," Working Papers 2017-006, Human Capital and Economic Opportunity Working Group.
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    Cited by:

    1. Delaney, Judith M. & Devereux, Paul J., 2021. "High School Rank in Math and English and the Gender Gap in STEM," Labour Economics, Elsevier, vol. 69(C).
    2. Benjamin Elsner & Ingo E Isphording & Ulf Zölitz, 2021. "Achievement Rank Affects Performance and Major Choices in College [Gender, competitiveness, and socialization at a young age: evidence from a matrilineal and a patriarchal society]," The Economic Journal, Royal Economic Society, vol. 131(640), pages 3182-3206.
    3. Delaney, Judith M. & Devereux, Paul J., 2019. "The Effect of High School Rank in English and Math on College Major Choice," IZA Discussion Papers 12846, Institute of Labor Economics (IZA).
    4. Megalokonomou, Rigissa & Zhang, Yi, 2022. "How Good Am I? Effects and Mechanisms behind Salient Ranks," IZA Discussion Papers 15604, Institute of Labor Economics (IZA).
    5. Delaney, Judith M. & Devereux, Paul J., 2022. "Rank Effects in Education: What Do We Know So Far?," IZA Discussion Papers 15128, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    rank effects; peer effects; omitted variables bias; ability tracking;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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