Be as Careful of the Books You Read as of the Company You Keep: Evidence on Peer Effects in Educational Choices

49 Pages Posted: 2 Jul 2007

See all articles by Giacomo De Giorgi

Giacomo De Giorgi

University College London; NBER; Federal Reserve Banks - Federal Reserve Bank of New York

Michele Pellizzari

University of Geneva - GSEM; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Silvia Redaelli

Bocconi University

Date Written: June 2007

Abstract

In this paper we investigate whether peers' behavior influences the choice of college major. Using a unique dataset of students at Bocconi University and exploiting the organization of teaching at this institution, we are able to identify the endogenous effect of peers on such decision through a novel identification strategy which solves the common econometric problems of studies of social interactions. Results show that, indeed, one is more likely to choose a major when many of her peers make the same choice. We estimate that, when it diverts students from majors in which they seem to have a relative ability advantage, this effect leads to lower average grades and graduation mark, a penalty that could cost up to 1,117 USD a year in the labor market.

Keywords: peer effects, education, social interaction, reflection

JEL Classification: J0, I21

Suggested Citation

De Giorgi, Giacomo and Pellizzari, Michele and Redaelli, Silvia, Be as Careful of the Books You Read as of the Company You Keep: Evidence on Peer Effects in Educational Choices (June 2007). IZA Discussion Paper No. 2833, Available at SSRN: https://ssrn.com/abstract=997263 or http://dx.doi.org/10.2139/ssrn.997263

Giacomo De Giorgi (Contact Author)

University College London ( email )

Gower Street
London
United Kingdom

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Michele Pellizzari

University of Geneva - GSEM ( email )

102 Bd Carl-Vogt
Genève, CH - 1205
Switzerland

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Silvia Redaelli

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

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