Academic Paper

Heterogeneous Beliefs and School Choice Mechanisms

by Adam Kapor, Christopher Neilson, and Seth Zimmerman

Last Updated: Jan 2017

This paper studies how welfare and academic outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. We use a survey of school choice participants to estimate a model of school choice that incorporates preference heterogeneity, strategic behavior, and subjective beliefs about admissions chances. We evaluate the equilibrium effects of switching to a strategy-proof deferred acceptance algorithm, and of improving the information available to households. Subjective beliefs differ from rational expectations values and predict choice behavior. Switching to a deferred acceptance algorithm raises welfare, but has limited effects on the distribution of test scores.

Online appendix here. Survey text here.