Extracurricular tutoring fever: Competitive pressure and peer effect

Recently, China's Ministry of Education has established a new department to regulate extracurricular tutoring for the purpose of reducing students' excessive academic burden. In this paper, we provide empirical evidence that academic competitiveness among students is a key driver of the extracurricular tutoring fever. Using the China Education Panel Survey (CEPS) data, we show that when their competitors attend extracurricular tutoring, students keep up with the actions of competitors, generating the peer effect of extracurricular tutoring. This effect is more pronounced for students with stronger competitive preferences. However, this irrational imitation behavior does not improve students' academic performance.