Peer and Leadership Effects in Academic and Athletic Performance

Many previous peer effects in higher education studies have assumed that peer groups form at the roommate, dorm floor, or dorm-level. Random assignment of students into squadrons at the US Air Force Academy allows us to identify the peer group with which students spend a majority of their time interacting. Using the squadron as the peer group, we find peer effects of much larger magnitude than those found in the previous literature. In separate estimations, we find for freshman students, a 100-point increase in the peer group average SAT verbal score increases individual GPA by 0.45 grade points and a 1-point increase in peer group GPA increases individual GPA by 0.65 grade points. Our results demonstrate the critical importance of properly identifying the relevant peer group when estimating peer effects. As evidence of this, we find that geographic proximity of students in dorm halls alone, as in Foster (forthcoming), does not generate measurable peer effects. We also find smaller peer effects at the roommate level, which virtually disappear once we control for the squadron-level peer effects. Our models correct for the endogeneity of individual and peer outcomes and rule out "common shocks" as the mechanism driving the peer effects.