Peer effects in risky choices among adolescents

Document type
Working Paper
Author(s)
Lucks, Konstanting; Luhrmann, Melanie; Winter, Joachim K.
Publisher
Institute for Fiscal Studies
Date of publication
25 August 2017
Series
IFS Working Paper; W17/16
Subject(s)
Children and Young People
Collection
Social welfare
Material type
Reports

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This report studies the effects of peers on risky decision making among adolescents in the age range of 13 to 15 years. In a field experiment, school classes were randomly allocated to two social interaction treatments. Students were allowed to discuss their choices with a natural peer – either a friend or a randomly selected classmate – before individually making choices in an incentivised lottery task. In the control group, adolescents made choices without being able to discuss them with a peer. In addition, information was gathered on existing peer networks. This allowed for the separation of two channels of peer influence, assortative matching on preferences and the effect of social interaction on choices. This report finds that friends and classmates are matched on socio-demographic characteristics but not on risk preferences. In contrast, social interaction strongly increases the similarity of teenagers’ risky choices. A large fraction of peers align their choices perfectly.

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