Abstract
The authors provide the first estimates of the impact of peers on achievement in high school economics. The estimates are obtained by analyzing three years of data on all high school students who take Georgia's required economics course and its accompanying high-stakes End of Course Test (Georgia Department of Education). They use an instrumental variables approach with teacher-level fixed effects to control for selection bias, simultaneity, measurement error in the measure of peer quality, and nonrandom assignment of teachers to students. The authors find that an increase of one standard deviation in the prior academic achievement of peers increases achievement in economics by 0.03 standard deviation.
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