Abstract for:

The Importance of Relative Performance Feedback Information: Evidence from a Natural Experiment using High School Students

Ghazala  Azmat,  Nagore  Iriberri,  March 2009
Paper No' CEPDP0915: | Full paper

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Keywords: school performance; relative performance, piece-rate, feedback, natural experiment, social comparison, self-perception, competitive preferences

JEL Classification: I21; M52; C30

Is hard copy/paper copy available? YES - Paper Copy Still In Print.

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This Paper is published under the following series: CEP Discussion Papers

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Abstract:

We study the effect of providing relative performance feedback information on performance under piece-rate incentives. A natural experiment that took place in a high school offers an unusual opportunity to test this effect in a real-effort setting. For one year only, students received information that allowed them to know whether they were above (below) the class average as well as the distance from this average. We exploit a rich panel data set and find that the provision of this information led to an increase of 5% in students’ grades. Moreover, the effect was significant for the whole distribution. However, once the information was removed the effect disappeared. To rule out the concern that the effect may be driven by teachers within the school, we verify our results using national level exams (externally graded) for the same students, and the effect remains.