This paper studies whether structural properties of friendship networks affect individual outcomes in education. We first develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to her Katz-Bonacich centrality measure. This...

I propose two new tests of Falk and Knell's (2004) prediction that individuals' reference income increases with ability. To overcome the difficulty that the reference incomeis not observed in existing large data sets, I extend Falk and Knell's model to establish a link between immigrants'...

We test potential social costs of educational inequality by analysing the influence of spatial and social segregation on educational achievements. In particular, based on recent PISA data sets from the UK and Germany, we investigate whether good neighbourhoods with a relatively high stock of...

We provide the first empirical application of a new approach proposed by Lee (2007) to estimate peer effects in a linear-in-means model. This approach allows to control for group-level unobservables and to solve the reflection problem. We investigate peer effects in student achievement in...

I propose two new tests of Falk and Knell's (2004)prediction that individuals'reference income increases with ability. To overcome the difficulty that the reference income is not observed in existing large data sets, I extend Falk and Knell's model to establish a link between immigrants'...