Changes
Jump to navigation
Jump to search
In the year following a reunion, section peers are around 15% more similar than class peers and the implied elasticity is 30%. Equality in the distance ratio in the year after reunions compared to other years can be rejected at the ten percent level for all outcomes except total compensation. Altogether, tests using alumni relations seem to show that peer effects in compensation and acquisition are driven by contemporaneous interactions. Pay for friends luck tests show that section peers are 6-10% more similar than class peers even when the peers compensation is due to lucky shocks in his industry.
→What Tests Achieved
He finds strong evidence of peer effects in executive compensation and acquisitions. Under the linear in means model he estimates a lower bound of elasticity of individual outcomes of 10%-20%.
===How might the tests be improved upon===
===What is an alternate empirical strategy===
