Match or Mismatch: Learning and Inertia in School Choice
نویسنده
چکیده
Centralized matching markets are designed assuming that participants make wellinformed choices upfront. However, this project uses data from NYC’s school choice system to show that families’ choices change after the initial match as they learn about schools. I develop an empirical model of evolving demand for schools under learning, endowment effects in response to prior assignments, and switching costs. The estimates suggest that there are even more changes in underlying demand than in observed choices, undermining the welfare performance of the initial match. To alleviate the welfare cost of demand changes, I theoretically and empirically investigate dynamic mechanisms that best accommodate choice changes. These mechanisms improve on the existing discretionary reapplication process. In addition, the gains from the mechanisms drastically change depending on the extent of demand-side inertia caused by switching costs. Thus, the gains from a centralized market depend not only on its design but also on demand-side frictions (such as demand changes and inertia).
منابع مشابه
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This thesis consists of essays about how to improve education markets through analyzing data generated by such markets. In chapter 1, I start with looking at how families decide which school to attend in a school choice system. Though such systems are designed assuming that families make well-informed choices upfront, I use data from NYC's high school choice system to show that families' choice...
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