The belief that both the behavior and outcomes of students are affected by their peers is important in shaping education policy. I analyze two polar education systems -tracking and mixing- and propose several criteria for their comparison. I find that tracking is the system that maximizes...

We study the effects that school choice mechanisms and school priorities have on the degree of sorting of students across schools and neighborhoods, when school quality is endogenously determined by the peer group. Using a model with income or ability heterogeneity, we compare the popular...

This paper examines the effect of peers on individual risk taking. In the absence of informational motives, we investigate why social utility concerns may drive peer effects. We test for two main channels: utility from payoff differences and from conforming to the peer. We show experimentally...

We study linear quadratic games played on a network where strategies are complements between neighbors and substitutes between agents at distance-two. We provide micro-founded problems where this pattern of interaction is due to a local congestion effect. Equilibrium behavior systematically...

Students in Brazil are typically assigned to classes based on their age ranking in their school grade. I exploit this rule to estimate the effects on maths achievement of being in a class with older peers for students in fifth grade of primary school. Because grade repetition is widespread in...

This paper studies a Tiebout model with two school districts, housing markets and peer effects to re-evaluate the optimality properties of the allocation of households to districts induced by head and income taxes. The main novel results reveal that head taxes are not superior to income taxes...

We analyze how the share of immigrant children in the classroom affects the edu- cational attainment of native Dutch children in terms of their language and math performance at the end of primary school. Our paper studies the spill-over effects at different parts of the test score distribution...

Many types of economic and social activities involve signifcant behavioral complementarities (peer effects) with neighbors in the social network. The same activities often exert externalities, that cumulates in "stocks" affecting agents' welfare and incentives. For instance, smoking is subject...