"School Choice Under Imperfect Information" - Modibo Sidibe, Duke University (Joint with Industrial Organization)

Date
Apr 18, 1:20 pm – 2:35 pm
Location
Julis Romo Rabinowitz Building, Rm 217 and via Zoom
Event Description

Modibo Sidibe is an Assistant Professor of Economics at Duke University. Modibo's research focuses on the impact of mismatch on economic outcomes.

Abstract 

As in many school districts around the world, prospective high-school students in Ghana are assigned through a centralized system. Using administrative data on applications, we report that more than 24\% of students do not submit the required number of schools, and matching outcomes show that more than 13\% of students end up unassigned, while almost a third of schools have at least one vacancy. To rationalize choices in this setting, we build and estimate a model where students engage in a costly search process to acquire information over school characteristics. The key insight of the model is that schooling decisions are exerted without the full examination of all available options, which may lead to sub-optimal choices. Using administrative data on choices and a survey on beliefs, we document a substantial welfare loss: distance traveled to schools could be divided by 3. We propose a mechanism design reform and show that collecting preferences over a limited number of school attributes rather than actual choices would recover most of the lost welfare.