Demand Analysis using Strategic Reports: An application to a school choice mechanism

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.

The Welfare Effects of Coordinated Assignment: Evidence from the New York City High School Match

“…The allocative issues on which we focus are likely important for understanding potential long-term effects on residential choices and school productivity. A number of recent papers use micro data from assignment mechanisms to understand school demand (Hastings, Kane, and Staiger 2009;He 2012;Ajayi 2013;Agarwal and Somaini 2014;Calsamiglia, Fu, and Güell 2014;Hwang 2014;Burgess et al 2015), typically using data from manipulable mechanisms like the Boston mechanism based on specific models of student information and sophistication. While some of these papers have compared the Boston mechanism and DA, ours is the first to examine congestion in an uncoordinated school assignment system.…”

Research Design Meets Market Design: Using Centralized Assignment for Impact Evaluation

“…8 Calsamiglia et al (2014) and Agarwal and Somaini (2015) simulate the Boston mechanism as part of an e ort to estimate preferences in a structural model of latent preferences over schools.…”

Are People Equally Other‐Regarding When Selecting a Match Versus Choosing an Allocation?

“…Economists and sociologists have long been interested in assignment processes in which agents are matched without a pairwise price mechanism, starting with the early work by Becker (). Examples of such processes include: the matching of organ donors with recipients (e.g., Baccara, Mok, and Yariv ); the assignment of students to schools, dorms, or work groups (e.g., Sacerdote ; Agarwal and Somaini ; Fafchamps and Mo ); and marriage markets without dowry, bride price, or prenuptial agreement (e.g., Becker ). Even in markets with a price mechanism, the assignment of goods and services to individual buyers often is subject to random variation due to fixed pricing or limited supply—for example, queuing at the emergency room, or lining up for fresh bread at the baker's.…”