Working Paper: NBER ID: w20775
Authors: Nikhil Agarwal; Paulo Somaini
Abstract: Several school districts use assignment systems that give students an incentive to misrepresent their preferences. We find evidence consistent with strategic behavior in Cambridge. Such strategizing can complicate preference analysis. This paper develops empirical methods for studying random utility models in a new and large class of school choice mechanisms. We show that preferences are non-parametrically identified under either sufficient variation in choice environments or a preference shifter. We then develop a tractable estimation procedure and apply it to Cambridge. Estimates suggest that while 82% of students are assigned to their stated first choice, only 72% are assigned to their true first choice because students avoid ranking competitive schools. Assuming that students behave optimally, the Immediate Acceptance mechanism is preferred by the average student to the Deferred Acceptance mechanism by an equivalent of 0.08 miles. The estimated difference is smaller if beliefs are biased, and reversed if students report truthfully.
Keywords: school choice; strategic behavior; random utility models
JEL Codes: C50; D47; I20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reported choices (D79) | actual preferences (D11) |
| immediate acceptance mechanism (D82) | utility (L90) |
| strategic behavior (L21) | student rankings (A14) |
| student rankings (A14) | preferences adjustment (D11) |
| strategic reporting (G38) | assignment outcomes (C78) |