Which Peers Matter: How Social Ties Affect Peer-group Effects

We study how the achievements of university students are influenced by the characteristics and achievements of peers in individuals' social networks. Defining peer group in terms of friendship and study partner ties enables us to apply a network regression model and thereby disentangle the influence of peers' performance from that of peers' background. We find significant positive peer effects via the academic achievements of friends and study partners. Students' grades increase with the abilities of study partners, who may or may not also be friends; no such effect is observed for friends who are not also study partners. Additionally, the effects of the abilities of other classmates are found to be insignificant. The results support the claim that peer influence acts mainly through knowledge-sharing channels between students who are connected by social ties.