The literature indicates that absenteeism from university classes is a common phenomenon in Australia and North America. Whether this constitutes a problem from society’s point of view depends upon whether absenteeism has a detrimental effect on student learning. Several authors in the economics discipline have argued the affirmative although none has established a causal linkage using experimental data and appropriate statistical analysis. The study reported here used panel data on business and economics students in an introductory statistics class at an Australian university to estimate the effect of attendance on performance. The methodology takes account of unobserved heterogeneity among students and in so doing constitutes an improvement over cross-section regression results reported previously. Attendance is found to have a small, but statistically significant, effect of on performance.