Tuesday, December 26, 2006

We're Watching You, Slacker:

The question is part of the broader study of "peer effects." When my neighbor, classmate, or housemate is particularly smart, dishonest, or lazy, what does that do to me? The question is tricky because most people can select their peers. For example, observing that many kids in a school play truant, we might conclude that they are a bad influence on one another, but we might also conclude that the school is in a deprived area where richer parents choose not to live.

Some economists have looked at situations where peers have been assigned randomly—to a college dormitory, for instance, or even (through a government housing program) to a particular neighborhood.

Mas and Moretti rely instead on scarily detailed data: having somehow sweet-talked a supermarket into cooperating, they compiled a data-set that tracks every single "beep," every transaction, for 370 workers in six stores, timed by the second, for two years. They can measure each worker's productivity by the second and note how it changes depending on who else is working at the same time.