Positive Peer Effects Research Articles

Peer effects affect the adaptation behaviour of rural residents to geohazards in China: a new policy pathway

ABSTRACT Disaster prevention and mitigation (DPM) is one of the responses to extreme climate change impacts and depends on the adoption of risk adaptation behaviour by rural residents. While residents exhibit a high willingness to adapt, they also show low behaviour with reference to DPM. While adaptation behaviour of individuals has been studied extensively, the mutual impact of adaptation behaviour among residents has so far been neglected in the literature. Evaluating this interaction could serve as an important foundation for refining disaster reduction policies. Drawing on social cognitive theory, we propose a novel theoretical framework to analyze peer effects on individual decision-making in DPM. Using data gathered from 536 respondents in Sichuan Province, China, this paper adopts the Bayes Markov chain Monte Carlo estimation method to perform a regression of the spatial probit model. Further, the propensity score matching model was used to explore peer effects on the transformation between residents’ willingness to actual behaviour. Results indicate significant and robust peer effects on DPM behaviour among residents. A heterogeneity test indicated that peer effects are predominantly observed among residents with low and medium social status perception and not in those with high social status perception. Peer effects have a significant and positive influence on the transformation from residents’ willingness to their behaviour. Residents are not completely independent in their decision-making, and complex social mechanisms dictate rational and irrational choices of behaviour. Therefore, it is necessary to fully consider positive peer effects on residents in the formulation of policies. Key policy insights Focusing on the adaptation behaviours and peer effects of rural residents is conducive to improving the public's acceptance of disaster reduction policies. It is difficult for homogenization policies to accurately meet the needs of rural residents in China, and the response to geohazard events requires diversified local policies. Through peer effect, the government can create a kind of environmental soft pressure and promote the transformation of residents’ willingness into behaviour. Due to peer effects, the government can utilize the leading role of a small number of target groups to reduce the cost of implementing disaster reduction policies.

Peer effects on influenza vaccination: Evidence from a city's administrative data in Japan

A characteristic that differentiates vaccination from other health behaviors is that it is a public good. By the nature of a public good, negative peer effects are expected when determining vaccination behavior for free-rider incentives. This study empirically analyzes whether the surrounding vaccination status in a community influences individual vaccination behavior using administrative data on influenza vaccination for all the older people within a city of Japan. We first employ fixed effect analysis with a lagged dependent variable. We then examine how vaccination behavior changes in the event of the loss of a cohabitant and how this effect interacts with the community peer effect. Our estimation results confirm positive peer effects: the higher the community's vaccination rate, the more the raising effect of the individual's vaccination rate.

Behavioral barriers impede pro-environmental decision-making: Experimental evidence from incentivized laboratory and vignette studies

Despite increasing concerns about climate change, many people struggle to translate their pro-environmental values into action. Here, we explore the origins of this value-action gap focusing on the role of behavioral barriers that are characteristic for many environmentally relevant decisions. Using incentivized online laboratory and vignette experiments, we find that individuals are less likely to behave in accordance with their environmental values if they are not immediately affected by the consequences of their actions, if the impacts of their actions are uncertain, and if they contribute only marginally to the outcome. The behavioral barriers also exert an indirect effect on environmental behavior by undermining reciprocity and positive peer effects. The value-action gaps are correlated across the different experimental settings with men and younger participants showing a particularly large gap. These insights are important for climate communication and education, highlighting the important role of the perceived relevance and potential consequences of personal behaviors in collective action.

IMPACT OF PEER PRESSURE ON DIVIDEND POLICY: EVIDENCE FROM FOOD & ALLIED AND POWER & FUEL SECTORS IN BANGLADESH

Firms’ decisions are not independent of their peers. This study aims to assess the impact of peer pressure on firms’ dividend policy. In a sample of 29 firms from 2014–2020, this study employed a fixed effect regression model and revealed that Bangladeshi firms adjusted their dividend policy in response to their peers. Firms adjust the dividend payout ratio (DPR) by 5.6 percent as a response to their peers. Social learning theory, reputation-based model of peer influence, persuasion bias and rivalry-based theory of mimicking explain how peer influence affects a firm’s dividend policy. The findings of positive peer effects on dividend policy are robust to an alternative proxy of dividend policy – dividend yield. Therefore, the study implied that managers’ decisions regarding the dividend policy are not independent of their peer firms. Investors can adjust their expectations of a firm’s dividend policy based on the overall dividend policy in the industry.

Gender peer effects in high schools: Evidence from India

This paper presents evidence of gender peer effects in high schools in India using new administrative data. Identification of gender peer effects is achieved by exploiting variation induced by idiosyncratic changes in gender composition across cohorts within schools, in addition to controlling for past scores. The proportion of female classmates in a student's cohort has a sizeable positive effect on the test scores of both male and female students. We find that peer effects vary non-linearly with the proportion of female students. Finally, we provide suggestive evidence on plausible mechanisms. We show that achievement spillovers are not the main driver of positive gender peer effects. Using a supplemental dataset, we show that a greater proportion of female students leads to an improved classroom environment in the context of Indian schools.

Peer effects of firm's sustainable transformation: Evidence from textual information analysis of annual financial reports in China

Effective peer effects and their influence channels play a crucial role in a focal firm's decision to pursue sustainability. This article analyzes a dataset comprising 2,098 sample firms over the period from 2011 to 2020, utilizing both textual analysis technology and the reverse maximum matching method to gauge transitions into sustainability (referred to as “sustainable transformation”) based on annual financial reports. Our empirical findings demonstrate significant and positive peer effects within individual industries, as revealed through panel data analysis. Sustainable transformation in peer firms markedly impacts a focal firm's sustainable transformation, primarily through changes in the tone of cross-industry communications, gaps in sustainability among different firms, and the increased attention of analysts. This study may provide valuable insights into the effects of sustainability-related information disclosure among peer firms in certain industries, as well as the mechanisms of information transmission and external pressure associated with peer effects in emerging markets. The results of this work may also offer guidance for policymakers, and market regulators, and firm managers.

Peer effects in R&D investment based on interlock network: Evidence from China

Different from extant literature on peer effects within industries or locations, this study aims to investigate whether and why the R&D investment of a focal firm is influenced by that of interlocked peer firms. Using instruments based on intransitivity, we identify positive interlock-based peer effects in R&D investment. Firm-pair evidence corroborates the existence of peer effects by showing that interlocks render similar R&D policies and exogenous policy-induced fractures of interlocks lead to diverging R&D investments. Further analysis indicates that the interactive effects are more salient among firms with access to greater peer information and more severe information asymmetry, suggesting that peer effects are consistent with the information theory. Moreover, peers from different industries/places and focal firms with orientation to the differentiation strategy, embodying greater supply and demand of heterogeneous information, are associated with stronger peer effects. Finally, corporate patent outcomes and Tobin's Q positively react to peers' R&D investment, a sign that the interlock-based peer effects are beneficial to the performance of the focal firm.

Effort Peer Effects in Team Production: Evidence from Professional Football

We exploit a unique data set from the Israeli Professional Football Leagues that provides high-frequency direct measures of players’ effort to estimate effort peer effects in a high-skill collaborative team task. Using two complementary identification strategies, we find robust evidence of substantial positive peer effects. Our findings highlight that effort spillovers play an important role in team production and that even a change in just one worker’s effort can substantially influence team effort and thus performance. Moreover, we present suggestive evidence that behavioral considerations are a relevant mechanism for creating peer effects even in highly skilled teams of workers. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4811 .

Do Peers Matter? Unhealthy Food and Beverages Preferences among Children in a Selected Rural Province in China

With the growing problem of childhood obesity, unhealthy dietary preferences among children have become an issue of worldwide concern. This article examines the class-peer effect of these preferences using random class assignment data from a field survey. The results show significant positive peer effects for both unhealthy food and beverages preference. These results remained robust after controlling for endogeneity issues using instrumental variables. Further analysis of the mechanism of peer effect shows that the better the relationship between classmates, the greater the influence peers have on unhealthy diet preferences among rural children. The same peer effect is found in situations where it is easy for children to obtain unhealthy food and beverages. The analysis of heterogeneity finds that the peer effects of unhealthy dietary preferences are stronger for girls, older students, and obese students. This paper also discusses the role of parents and schools in mitigating the peer effect. This paper proposes policy recommendations for rural areas in China to improve dietary preferences in children. These results may also provide useful guidelines for policy in other developing countries.

Haste Makes No Waste: Positive Peer Effects of Classroom Speed Competition on Learning

AbstractThis study investigates the effects of speed competition in classrooms on young pupils' learning outcomes. To examine how faster peers' speed affects slower pupils' speed and learning, we employ students' daily progress data in a self‐learning programme at BRAC primary schools in Bangladesh. The programme's unique setting allows us to address the reflection problem reasonably well. While speed competition could generate negative consequences, our results show overall positive peer effects on problem‐solving time and scores. The effects are stronger among peers with similar abilities, without negatively affecting others. Our results show efficiency gains from non‐market competition in education and learning.

More Rights but Less Gains: Relaxed Birth Control Policy and the Loss for Women

AbstractIn view of its aging population, China initiated in 2012 a relaxed birth control policy after a three‐decades‐long implementation of the restrictive one‐child policy. This paper examines how China's relaxed birth control policy leads to gender inequality. It specifically focuses on migrant workers because they account for a significant portion of the working group. Using the National Migrant Population Dynamic Monitoring Survey from 2014 to 2016, we found that China's two‐child pilot policy reduced female labor force participation by 1.4 percentage points. This negative effect was more pronounced for women with higher educational levels or working in the private sector because employers foresee greater risks of productivity decline. We demonstrated that the gender pay gap increased from RMB956 to RMB1,053 during this same period. Pinpointing these unintended consequences brought about by the relaxation of the one‐child policy helps provide a more complete picture of inequality and make sense of persistent relative poverty in Chinese society. To counteract gender discrimination, females are advised to work outside their home jurisdictions and take advantage of positive peer effects.

Impact of Migration on Non-Migrant School Completion Rates and Enrolment in South Africa

South Africa struggles with low secondary school completion rates and this has a negative effect on poverty and inequality. In this study, we examine the relationship between internal migration (international migrants were excluded) and non-migrant educational outcomes (secondary school enrolment and completion rates) in South Africa between 1996 and 2011. We use census data for the years 1996, 2001 and 2011 (at the district and municipal levels) in several linear probability regression models that include the First Difference (FD) and System Generalised Method of Moments (GMM-SYS) with instrumental variables. The 2011 census is the latest available in South Africa now. We find that internal migrants have a positive effect on both enrolment and completion rates of non-migrants. These results vary in intensity depending on the level of education of both internal migrant and non-migrant household heads. These results have implications for the local labour market and for income inequality in South Africa; internal migrants provide positive peer effects that contribute to raising non-migration enrolment and completion. Internal migrants also provide job market competition which influences non-migrants to complete secondary schooling. There is scant empirical evidence on the impact of internal migration on education outcomes in African countries, especially in South Africa. Our paper provides evidence from a country with a history of persistent internal migration. Most prior research has focused on the relationship between immigration and education outcomes in the developed world. We recommend that government improves secondary school quality in rural and urban areas and increase study loans for students at tertiary institutions.

Classmates and friends matter! Peer effects on cognitive ability formation

In this paper, we investigate the impact of peer effects on cognitive ability formation at two different levels – class peers and close friends simultaneously. We use random class assignments in the China Education Panel Survey (CEPS) to deal with ability sorting and self-selection into classroom when estimating class peer effects. To identify close friend peer effects, we include initial human capital to control for time-invariant unobservables, as stable friendship implies that unobserved preference based on which students make friends is likely to stay unchanged, especially within the one-year frame of the data. We find significant positive peer effects on students' cognitive ability formation at both levels. Peer effects are heterogeneous across student ability. Peer effects work through two channels – peer conformity and peer complementarity. We find both channels generate positive peer effects and jointly determine the size of overall estimated peer effects.

Keeping More Achievers in School: Short-Term Enrollment and Achievement Effects of Free Primary Education in the Benin Republic

ABSTRACT With the Millennium Development Goals (MDGs) and the United Nations Sustainable Development Goals (SDGs), several African governments are making education free as part of their strategies to achieve universal primary education. In 2006, the Benin government adopted a Free Primary Education (FPE) policy, abolishing parent-paid tuition fees and increasing resources towards schools. In this article, the author examines whether or not this policy reduced the wealth and gender gap and prior geographical disparities in educational outcomes. Also evaluated is whether expanded access to education affected student achievement. The methodology used was a difference-in-differences approach that relied on pre-policy differences in dropout rates across municipalities to identify the effects of the policy. Analyzing municipality and household-level data, the author found evidence that the fee elimination policy reduced inequality of access by increasing school completion rates for traditionally disadvantaged groups, which included girls and low-income populations. The increased enrollment also had no significant adverse effect on student achievement as measured by the probability of passing the primary school exit exam. Moreover, the policy potentially helped low-performing municipalities narrow the achievement gap by retaining more high-achieving students, who would otherwise have dropped out of the education system. If strategies such as making schooling more affordable and available are enough to narrow educational disparities and retain more high-achieving students in the education system with potentially positive peer effects, then Benin’s experience may have important policy implications for other African and developing countries that use similar education strategies.

Does a “bad apple” spoil the bunch? The impact of low-achieving students on non-cognitive outcomes

This paper investigates whether the presence of low-achieving classmates affects the noncognitive outcomes of regular students in junior high school. Exploiting random assignments of teachers and students to classes, we show that having classmates who had ever repeated a grade in primary school improves students' mental health and social skills, and the positive peer effects are concentrated among students with a longer duration of peer exposure and students from low socioeconomic backgrounds. Mechanism analysis reveals that the improved teacher–student and student–student interactions contribute to the enhancement of noncognitive outcomes.

Classroom compositional effects on low-ability students' achievement in China.

Peer effects are at the center of educational policy debates regarding school choice, ability grouping, and instructional design. Though emerging empirical evidence suggests that positive peer effects exist, less is known about how it affects students with varying cognitive abilities. Using a nationally representative sample from China, we generated a student-level measure of classroom composition of peers based on cognitive ability to understand the benefits or pitfalls of placing low-ability students with heterogeneous or homogenous classmates. We conducted this analysis separately for grades seven and nine students after controlling for student background, family characteristics, and school endogeneity. We reaffirmed the overall positive-but small-peer effects on the performance rankings. Low-ability children scored much lower than their counterparts when they studied in cognitively diverse classrooms. However, this effect negates the overall positive impact of studying with high-ability peers and the pattern is consistent across rural and urban schools.

Social influence in adolescence as a double-edged sword.

Social learning is fundamental to human development, helping individuals adapt to changing circumstances and cooperate in groups. During the formative years of adolescence, the social environment shapes people's socio-cognitive skills needed in adulthood. Although peer influence among adolescents is traditionally associated with risky and unruly conduct, with long-term negative effects on educational, economic and health outcomes, recent findings suggest that peers may also have a positive impact. Here, we present a series of experiments with 10–20-year-olds (n = 146) showing that positive and negative peer effects reflect a domain-general factor of social information use which declines during adolescence. Exposure to disobedient peers provoked rule breaking, and selfish peers reduced prosocial behaviour, particularly in early adolescence. However, compliant peers also promoted rule compliance and fair peers increased prosociality. A belief formation task further revealed that younger adolescents tend to assimilate social information, while older adolescents prioritize personal views. Our results highlight early adolescence as a key window for peer-based interventions to improve developmental trajectories.

Identifying and decomposing peer effects on decision-making using a randomized controlled trial

Utilizing a randomized controlled trial (RCT) in traditional clusters of apparel and textile firms in Vietnam, this paper investigates peer effects on firm managers’ decisions to participate in seminars on export promotion. We invited 131 randomly selected firm representatives to three one-day seminars on export promotion. We use the number of randomly invited peers to identify peer effects. We further decompose the invited peers into peers invited to the same seminar, those invited to the earlier seminars, and those invited to the later seminars. We find that the former has a positive effect on firms' participation, whereas the latter two have no significant effect. These results imply that peer effects on participation primarily arise from the benefits of face-to-face interactions. The presence of positive peer effects suggests that multiple equilibria in terms of the share of participants within each village of firms may emerge, which is also consistent with our observations.

Peer effects on job satisfaction from exposure to elderly workers

The Elderly Employment Stabilization Law, revised in 2006, helped the government increase elderly employment. While there has been much debate on whether the reemployment of elderly workers has substituted for or increased the employment of young workers, little attention has been paid to the potential peer effects of the former group on the latter’s productivity and other outcomes in the workplace. There might be knowledge spillovers from elderly workers to peers (positive peer effects) or the presence of unmotivated elderly workers lowering the morale of their coworkers (negative peer effects). In this paper, we investigate such peer effects from exposure to elderly workers using the employee satisfaction survey of a Japanese firm. We show that, on average, elderly workers do not have significant peer effects on coworkers’ satisfaction. However, the effects are heterogeneous depending on the ability of elderly workers as measured by their wages, and the age and job levels of their peers. Namely, nonmanagerial workers, particularly those in their 50s, are more satisfied and coworkers in their 30s and 40s receive more training when they work with elderly workers. The positive effects are significant when the focal elderly workers come from other units rather than when they stay in the same units implying that the sharing of broad experience might mediate the effect. In contrast, the presence of elderly workers makes first-line managers feel that there is poor communication in the workplace.

Peer Effects of Electronic Media Use Among Adolescents: A Class Social Network Perspective

With the popularity of Internet and intelligent electronic products, adolescents spend more time playing video games and watching TV online, which has gradually become a concern of the whole society. However, there is no research on the peer effects of electronic media in China. Using the 2013-2014 random class assignment data from China Education Panel Survey（CEPS）, this paper analyzes the peer effects of playing video games and watching TV online among the students in seventh and ninth grades. We study the extended margin of peer effects from the participation behavior of playing video games（watching TV）, and the intensive margin of peer effects from the time spent on playing video games（watching TV）. The results suggest positive and significant peer effects in both participation and time spent in playing video games（watching TV）. The probability of students playing video games（watching TV）increases by 0.212%（0.286%）if the proportion of their classmates playing video games（watching TV）increases by 1%; while the time students spending on playing video games（watching TV）increases by 0.338（0.240）hours if their classmates spend 1 more hour playing video games（watching TV）. The results are robust after excluding correlation effects using instrumental variables or pseudo regression. The analysis of the influence mechanism of peer effects shows that the better the relationship between classmates, the greater the peer effects of playing video games, but this mechanism has no significant influence on the peer effects of watching TV. The severity of parents to their children playing video games（watching TV）does not change peer effects. The results of heterogeneity analysis show that the proportion of peer participation affects the student behavior of playing video games or watching TV on weekdays or weekends, but the peer effects only significantly affect the time spent on weekends, and does not significantly affect the time spent on weekdays. There is no significant difference in peer effects between male and female students playing video games, but the peer effects of female students watching TV are greater.