The concept of peer effect in education is that the behavior or outcome of one student is affected by the characteristic, behavior or outcome of peers in dormitory, class, grade, or school. The initial research model is the homogeneous model that treats peer effect as zerosum phenomena, namely no matter how individuals choose peers, total benefit is the same. However,the heterogeneity mode implies that the total benefit can improve by the reasonable distribution of peers, because the peer effect for different students is different. The research method also changed, the statistical correlation, such as OLS, is replaced by the causal inference, such as random experiment, natural experiment and quasiexperiment. The research of peer effect is not only beneficial to correctly recognize and evaluate relevant education policy, but also beneficial to correctly guide and optimally organize the school teaching.