By Caroline Stokes
The Stanford Daily, Stanford

(UWire)--Most Stanford students have taken at least one class just because a friend was taking it or had recommended it. But an academic paper co-authored by Stanford Economics Prof. Giacomo De Giorgi suggests that these peer-influenced decisions may be diminishing students' future earnings.

De Giorgi and two professors from Bocconi University in Italy recently conducted a controlled study on first-year business students at the Italian university, where students are randomly assigned to sections for their nine required first-year classes.  After the first three semesters, students choose either a business or an economics major.

"Results show that, indeed, one is more likely to choose a major when many of his/her peers make the same choice"

-Prof. Giacomo De Giorgi

Based on their analysis of these initial semesters, the researchers found that being frequently exposed to another student who chose economics (‘frequently' defined as having at least four out of the nine sections with the student), increased the likelihood that the student would also study economics, which is the less popular major by 7.4 percent.

In their paper, "Be as Careful of the Company You Keep as of the Books You Read: Peer Effects in Education and on the Labor Market," the professors argue that the influence that peers' academic decisions have on a student's choice of major can prevent that student from choosing the major which best capitalizes on her or his individual skill set. The researchers claim the costs of this decision may be a lower GPA and, as a result, a reduced salary in the future.

"Results show that, indeed, one is more likely to choose a major when many of his/her peers make the same choice," the paper explains.

"We estimate that, when it diverts students from majors in which they seem to have a relative ability advantage, this effect leads to lower average grades and graduation mark, a penalty that in the labor market could cost up to 871 euros (1,117 USD) a year."

Many say Stanford students are just as heavily influenced by their peers when making academic decisions.

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When English major Luke Henesy ‘10 realized after his sophomore year that he was not looking forward to reading Shakespeare and studying literature during his last two years at Stanford, he found himself searching for a new major. When Henesy's roommate in Madrid last fall happened to be an architectural design major who introduced Henesy to this relatively new department at Stanford, he started mapping out how he could start and complete the major in two years. Soon, he had a new major.

"I was basically open to anything in Spain," he continued. "If my roommate had been a studio art major, I probably would've done that if they'd spoke highly about it...I feel like with a lot of people, major decisions end up being pretty circumstantial. Like based on the people that you know, what you're exposed to."

Grace Laidlaw ‘10 agreed that peers can easily influence students' academic choices.

"I definitely decided to do Bio over HumBio because my boyfriend at the time, who I think is one of the smartest people I know, told me that HumBio was fuzzy and a lot less useful than Bio," she said.

Laura Selznick, special assistant for diversity outreach to the Vice Provost for Undergraduate Education, has advised Stanford students since 1986, and is not surprised by these instances of peer-influenced major decisions.

"Stanford students are often more comfortable talking to their peers than the professors," she explained.

Ashley Rhoades ‘12 agreed that peers are more easily accessible and useful sources of information on classes than advisors.

"[My pre-assigned freshman year advisor] didn't really give me any sense of direction," Rhoades said. "[She] just kind of just told me to do what I wanted to do, which was kind of overwhelming as a freshman. But my peer mentor was actually a lot more helpful than my actual advisor. He was really good about telling me which classes I should be taking that are good, which professors and stuff."

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