This paper asks how search costs, limited awareness of schools, misperceptions of schools’ attributes, and inaccurate beliefs over unknown schools affect families’ search and application decisions in Chile’s nation wide school choice process. We combine novel data on search activity with a panel of household surveys, administrative application data, randomized information experiments, and a model of demand and sequential search with subjective beliefs. Descriptively, households hold inaccurate beliefs and misperceptions along multiple dimensions which distort the perceived returns to search. Most importantly, they do not know all schools, and misperceive quality ratings of the schools they know and like. Improving the search technology would raise households’ search effort and welfare. Correcting misperceptions about known schools’ observables would cause students to match to schools with higher quality, equal to what can be achieved under a full-information benchmark. Models with out misperceptions would incorrectly predict quality reductions.
Authors
Patrick Agte, Claudia Allende, Adam Kapor, Christopher Neilson, Fernando Ochoa
- Acknowledgements & Disclosure
- This project was funded in part by the National Science Foundation Grant Award #1919504, titled "Biased Beliefs and Search in Education Markets." The project was implemented in collaboration with the Government of Chile and the tech NGO ConsiliumBots. Christopher Neilson, the founder and CEO of ConsiliumBots. He is also the project lead for a publicly procured contract between ConsiliumBots and the Government of Chile to run the national student match. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w32670
- Pages
- 96
- Published in
- United States of America
Table of Contents
- Introduction 1
- Motivating Example 8
- Empirical Setting 10
- School Choice in Chile 10
- Study Design 12
- Data 14
- Descriptive Analysis 16
- Knowledge, Perceptions, and Beliefs 16
- Search Behavior 20
- Heterogeneity by SES Status 21
- Experimental Analysis 22
- Intervention Design 22
- Impact of Search Aid Interventions 23
- Impact of Feedback Treatment 25
- Model 28
- Information, Preferences, Perceptions, and Application Portfolios 28
- Timing, States, Beliefs, Search 31
- Estimation 37
- Results and Counterfactual Simulations 39
- Results 39
- Counterfactuals 41
- Conclusion 47
- References 48
- Additional Descriptive Results 1
- Additional Experimental Results 8
- Model Appendix 10
- Estimation Appendix 16
- Identification and Estimation of Second-Stage Parameters 16
- Step 1 Estimation Details 20
- Additional Model Estimates 22
- Additional Information on the School Choice System in Chile 1
- Additional Information on the School Quality Categories 8
- Additional Information on Data Collection and School Explorer Platform 10
- Additional Information on Search Aid Intervention 16
- Additional Information on Feedback Intervention 22
- Additional Descriptive Results by SES Status 28
