Social Networks and Peer Efects on Academic Performance1

Abstract

Peer effects in education—effects of peers’ academic outcomes or characteristics on a student’s academic outcomes—have been studied extensively but there is still no consensus on peer effects under university settings. This paper attempts to estimate peer effects on undergraduate students’ GPA using a spatial autoregressive model with individual-specific social interactions in a group setting to separate endogenous peer effects from contextual peer effects. We conduct a survey of students’ social networks to identify different types of peer groups: best friends, study groups, hangout groups and activity groups. We find positive and significant endogenous peer effects in all group types except best friends and the endogenous peer effect in study groups is the largest. This is intuitive since interactions in study groups may be aimed at improving academic performance whereas interactions among best friends may be more personal and thereby have no effect on academic outcomes.