Conley, Tim Mehta, Nirav Stinebrickner, Ralph Stinebrickner, Todd
Year of Publication:
CIBC Working Paper Series 2015-4
We develop and estimate an equilibrium model of study time choices of students on a social network. We examine how network structure interacts with student characteristics to affect academic achievement. Due to data limitations, few papers examine the mechanisms through which peer effects operate. The model is designed to exploit unique data collected in the Berea Panel Study. Study time data allow us to quantify an intuitive mechanism for social interactions: the cost of own study time may depend on friend study time. Social network data allow study time choices and resulting academic achievement to be embedded in an equilibrium framework. We find friend study time strongly affects own study time, and, therefore, student achievement. Not taking into account equilibrium behavior would drastically understate the effect of peers. Sorting on friend characteristics appears important in explaining variation across students in study time and achievement, and determines the aggregate achievement level.