Abstract
SummaryUsing the random assignment of university engineering students to peer groups during introductory freshmen weeks, this paper studies how a student's parental income and facial attractiveness affect the grade outcomes of peers. The results show that exposure to highly desirable peers with respect to socioeconomic background and beauty improves grades. The results operate chiefly through a direct spillover channel and also through an indirect marriage market channel, through which exposure to high‐desirability peers improves well‐being. A field experiment suggests that the marriage market mechanism is likely to be limited to students not currently in a romantic relationship.
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