Achievement Rank Affects Performance and Major Choices in College

Ingo E Isphording,Benjamin Elsner,Ulf Zölitz

doi:10.1093/ej/ueab034

Ingo E Isphording, Benjamin Elsner + Show 1 more

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https://doi.org/10.1093/ej/ueab034

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Abstract

AbstractIn this paper we study how a student's ordinal rank in a peer group affects performance and specialisation choices in university. By exploiting data with repeated random assignment of students to teaching sections, we find that a higher rank increases performance and the probability of choosing related follow-up courses and majors. We document two types of dynamic effect. First, earlier ranks are less important than later ranks. Second, responses to rank changes are asymmetric: improvements in rank raise performance, while decreases in rank have no effect. Rank effects partially operate through students’ expectations about future grades.

Highlights

When making educational choices, students face considerable uncertainty
Unlike in most previous studies – where the same peers interact for many years – we show that even brief social interactions are sufficient to produce substantial rank effects
This and the following tables report coefficients from separate regressions of the dependent variables shown in the column headers on the ordinal rank, adjusted for a third-order polynomial in predetermined GPA, individual characteristics, and the fixed effects listed at the bottom

Summary

Introduction

Decisions such as which college to attend or which major to choose require students to carefully assess the expected costs and benefits of each choice. An important factor that may affect expected returns is a student’s relative ability in a peer group (Marsh, 1987). Between two otherwise identical people, the person with the higher relative ability tends to be more confident and believes that she is more capable than others.. Between two otherwise identical people, the person with the higher relative ability tends to be more confident and believes that she is more capable than others.1 Through this mechanism, a student’s relative ability early in her career may influence her expected returns and affect her effort, performance, and later career choices Between two otherwise identical people, the person with the higher relative ability tends to be more confident and believes that she is more capable than others. Through this mechanism, a student’s relative ability early in her career may influence her expected returns and affect her effort, performance, and later career choices

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