Searching for Peer Group Effects: A Test of the Contagion Hypothesis

Using information on birth and kindergarten start dates to generate an exogenous measure of the relative age of a student's peer group, we find that, controlling for age, females with older peers are more likely to use substances than females with younger peers. Because there is no reason to suspect that birth and kindergarten start dates should be correlated with the choice of school, the socioeconomic status of a child's peers, or neighborhood unobservables, we view our results with regard to females as providing support for the idea that peer behavior can be contagious.