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Understanding how heterogeneity in peer group composition affects academic attainment has important implications for how schools organize students in group settings. The random assignment of cadets to companies at West Point affords an opportunity to investigate this issue empirically. Estimates of the impact of peer group heterogeneity in math SAT scores on freshmen-year academic performance reveals that more heterogeneous peer groups have positive effects on individual grades. High-ability peers account for most of the positive effect, while low-ability peers have no measureable effect. (JEL I23, J24, M54)
David S. Lyle (Tue,) studied this question.