Peer group effects on the academic performance of Italian students

We analyse peer effects among students of a middle-sized Italian public university. We explain students’ average grade in exams passed during their Second Level Degree course on the basis of their pre-determined measures of abilities, personal characteristics and peer group abilities. Thanks to a rich administrative data set, we are able to build a variety of definitions of peer groups, describing different kinds of students’ interaction, based on classes attended together or exams taken in the same session. Self-selection problems are handled through Two-Stage Least Squares estimations using as an instrument, the exogenous assignment of students to different teaching classes in the compulsory courses attended during their First Level Degree course. We find statistically significant positive peer group effects, which are robust to the different definitions of peer group and to different measures of abilities.     

Peer group effects in applied general equilibrium

Summary. In this paper, I develop an applied general equilibrium environment with peer group effects. The application I consider is schooling. The framework used here is general equilibrium with clubs. I establish the existence of equilibrium for the economy with a finite number of school types. This result is then extended to the case where the set of school types is a continuum. The two welfare theorems are shown to hold for both economies. To compute the equilibrium, I construct a Negishi mapping from the set of weights on individual type's utility to the set of transfers that support the corresponding Pareto allocations as competitive equilibria with transfers. Because this mapping is a correspondence, a version of Scarf's algorithm is used to find a competitive equilibrium. Received: June 9, 1999; revised version: March 13, 2000     

On the effects of group identity in strategic environments

We examine differences in behavior between subjects interacting with a member of either the same or different identity group in both a centipede game and a series of stag hunt games. We find evidence that subjects interacting with outgroup members are more likely to behave as though best-responding to uniform randomization of the partner. We conclude that group identity not only affects player׳s social preferences, as identified in earlier research, but also affects the decision making process, independent of changes in the utility function.     

Peer effects and selection effects on smoking among Canadian youth

Abstract.  A number of studies have indicated that peer smoking is a highly influential factor in a young person's decision to smoke. However, this finding is suspect, because the studies often fail to account for selection and simultaneity bias. This paper develops an econometric model of youth smoking that incorporates both peer effects and selection effects. Identification is achieved by using the degree of selection on observables as a proxy for the degree of selection on unobservables. The results indicate that peers have some influence on a young person's decision to smoke, but that influence is much weaker than is suggested by reduced form models. JEL classification: C35, I12     

The tragedy of the commons revisited: The importance of group decision-making

We use a laboratory experiment to compare the way groups and individuals behave in an inter-temporal common pool dilemma. The experimental design distinguishes between a non-strategic problem where players (individuals or groups of three) make decisions without interaction and a strategic part where players harvest from a common pool. This allows us to correct for differences between individuals and groups in the quality of decisions when testing for differences in competitiveness. Group decisions are either made by majority rule or unanimity. The results show that groups are less myopic than individuals (i.e., they make qualitatively better decisions) but that they are more competitive than individuals when placed in a strategic setting. The net result for groups deciding by majority rule is that they make less efficient decisions in the strategic game than individuals do. We are able to show that this is caused by the median voter departing from her original preference in early periods with a shrinking pool. When groups have to make unanimous decisions they start playing the strategic game more efficiently then individuals do, but they rapidly become more competitive with repetition of the game.     

Social aspirations in European banks: peer-influenced risk behaviour

We test a sample of 3,586 banks from 33 European countries to determine whether performances above or below a social aspiration level (median performance of peer banks) influence banks’ aggregate risk levels. Our results are consistent with the behavioural theory of the firm and prospect theory in that we find that bank performance below a bank’s social aspiration level is followed by increased aggregate risk, i.e. risk-taking behaviour in the subsequent year. Although under-performing banks tend to be risk-takers, large banks and banks with high aggregate risk levels tend to limit the increase in their aggregate risk levels.     

Peer effects in computer assisted learning: evidence from a randomized experiment

We conduct a large scale experiment to investigate peer effects in computer assisted learning (CAL). Identification relies on three levels of randomization. We find an average 0.17 standard deviation improvement in math scores among primary school students. This average effect is the same for students treated individually or in pairs, implying that peer effects double the learning benefit from a given equipment. Among paired students, poor performers benefit more from CAL when paired with good performers and vice versa. Average performers benefit equally irrespective of who they are paired with. This suggests that the treatment is dominated by knowledge exchange between peers. We also find that CAL treatment reduces the dispersion in math scores and that the beneficial effects of CAL can be strengthened if weak students are systematically paired with strong students.     

Choosing the agent's group identity in a trust game with delegated decision making

Members of a given social group often favor members of their own group identity over people with different group identities. We construct a trust game in which the principal delegates the decision about an investment into a receiver to an agent who either favors the principal's or the receiver's group identity. When choosing the agent's group identity the principal faces a trade‐off between a loyal agent and an agent who might increase the receiver's willingness to cooperate. We solve for the principal's decision in a subgame‐perfect nash equilibrium for the two scenarios of a risk‐neutral and risk‐averse agent, respectively.     

The effects of exchange rate risk on economic performance: the Turkish experience

This study examines the effects of real exchange rate risk on the economic performance for an emerging, small open economy: Turkey. When the ratios of the total foreign exchange liabilities of the Central Bank of the Republic of Turkey (CBRT) to: (1) total reserves; (2) the CBRT's reserves; and (3) the CBRT's total Turkish lira liabilities are taken proxy of exchange rate risk, the empirical evidence suggests that the increase in exchange rate risk causes a depreciation in the real exchange rate, an increase in prices and a decrease in output.     

Holdout behaviour: a question of diversification,risk aversion and expectation

We argue a holdout is not a destructive investor behaviour but an investment decision. The decision is characterized by the mean-variance approach. We investigate intercreditor conflict by diverse portfolio structure. We demonstrate that at some point during the Greek (2012) and Argentine (2005) debt restructuring programmes, it was reasonable for the investor to hold out. This model shows that the investment decision is based on the portfolio structure, risk aversion and expected possible payment of the debtor, so there is no free-rider behaviour. This is based on the fact that the investor harms herself due to destructive and uncooperative behaviour.     

Determinants of bank risk behaviour in EMU countries

This article investigates the determinants of banking sector risk behaviour in EMU countries over the period 2004Q4–2013Q3. Average ‘Distance-to-default (DtD)’ based on all publicly listed banks headquartered in a particular country is used as an indicator of banking risk. Macroeconomic fundamentals, market sentiments and gross debt-to-GDP together with private debt are considered as factors explaining risk behaviour. Using a panel framework, I found that the market sentiments, debt-to-GDP ratio and nonfinancial institutions debt significantly affect banking sector fragility.     

The effects of parent company business on occupational credit union behaviour

The allocation of British bilateral foreign aid among developing countries is simultaneously modelled, focusing on allocations during the period 1980–87. Two aid allocation decisions are analysed using a variant of the Lee-Maddala econometric model. The first decision concerns the determination of developing country eligibility for aid, while the second concerns the amount of aid eligible countries are allocated. Given the implied two-part decision-making process, sample selection techniques are employed. It is hypothesized that British bilateral aid eligibility and amount decisions are based on Bristain's humanitarian, commercial and political interests in developing countries. Results obtained indicate that these decisions are generally consistent with each of these interests, especially those relating to the political importance of Commonwealth members.     

The effects of regulation on stochastic systematic risk

There is recent evidence that systematic risk measures for most firms are stochastic, and that non-stationarity in systematic risk characteristics for regulated firms is related to the presence of regulation. Prior empirical evidence, which suggests that regulation reduces risk, did not incorporate the stochastic nature of the risk/return relationship. There are also problems with the modeling of regulation in this earlier work, and there is evidence that regulated firms may have recently grown riskier. These issues are addressed here by examining a stochastic model that structurally incorporates regulation. Differences in the risk structure of regulated and unregulated firms are identified. Analytic results, simulation results, and actual empirical estimates provide evidence that regulation reduces, but does not eliminate, stochastic systematic risk. The actual empirical results suggest that regulators do reduce stochastic systematic risk, which should lead to lower required rates of return for utilities.     

增长中的分化:同群效应对家庭消费的影响研究

理解消费增长中的分化现象是更好发挥消费主引擎作用、加快构建双循环新格局的关键。本文基于相对收入消费理论假说,利用2010—2014年城镇住户调查数据,分析城镇家庭消费波动与分化的同群效应及其影响机制。研究发现:同群效应可以解释家庭消费性支出19.8%的变化,对衣着、食品、居住、教育支出变化的影响分别为37.7%、32.2%、25.1%和21.7%。同群效应对特大/超大城市家庭的衣着、手机等可见性支出有显著影响,大城市中低收入家庭在教育支出中面临更大的同群竞争压力。同群效应的"追赶琼斯"机制是造成消费选择和消费水平分化的主要原因,同群风险分担机制能缓解消费冲击带来的福利下降。致力促进形成国内大市场,应发展壮大中等收入群体,完善降低低收入群体消费风险的保障机制,充分发挥同群效应在消费升级中的需求牵引作用;解决教育等公共服务供给的相对结构性稀缺,以优质供给激活消费大市场。     

The importance of worker, firm and match effects in the formation of wages

This paper estimates a Mincerian wage equation with worker, firm, and match specific effects and thereby complements the growing empirical literature started by the seminal paper of Abowd (Econometrica 67:251–333, 1999b). The analysis takes advantage of the extensive Danish IDA data which provides wage information on the entire working population in a 27-year period. We find that the major part of wage dispersion in the Danish labor market can be explained by differences in worker characteristics. However, the relative contributions of the three components vary across subgroups of workers. The match effect constitutes a non-negligible part of the overall wage dispersion. An analysis of inter-industry wage differentials shows that firm characteristics are more important at the industry level than at the worker level. Similarly, we find evidence that high-wage workers tend to sort into high-wage industries to a larger extent than they sort into high-wage firms within industries. The mobility pattern of workers is related to the quality of the firm and the match. Finally, we find that firms’ wage policies differ across subgroups.     

Growth and risk at the industry level: The real effects of financial liberalization

This paper analyzes the effects of financial liberalization on growth and volatility at the industry level in a large sample of countries. We estimate the impact of liberalization on production, employment, firm entry, capital accumulation, and productivity. In order to overcome omitted variables concerns, we employ a number of alternative difference-in-differences estimation strategies. We implement a propensity score matching algorithm to find a control group for each liberalizing country. In addition, we exploit variation in industry characteristics to obtain an alternative set of difference-in-differences estimates. Financial liberalization is found to have a positive effect on both growth and volatility of production across industries. The positive growth effect comes from increased entry of firms, higher capital accumulation, and an expansion in total employment. By contrast, we do not detect any effect of financial liberalization on measured productivity. Finally, the growth effects of liberalization appear temporary rather than permanent.     

Forecasting recessions: the importance of the financial cycle

Financial cycles can be important drivers of real activity, but there is scant evidence about how well they signal recession risks. We address this question, using a range of financial cycle measures. Unlike most papers, ours assesses forecasting performance not just for the United States but also for a panel of advanced and emerging market economies. We find that financial cycle measures have significant forecasting power both in and out of sample, even for a three-year horizon. Moreover, they outperform the term spread - the most widely used indicator in the literature - in nearly all specifications. These results are robust to different recession specifications.