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How Do College Students Form Expectations?

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  • Basit Zafar

Abstract

This study focuses on how college students form expectations about various major-specific outcomes. For this purpose, I collect a panel data set of Northwestern University undergraduates that contains their subjective expectations about major-specific outcomes. Although students tend to be overconfident about their future academic performance, they revise their expectations in expected ways. The updating process is found to be consistent with a Bayesian learning model. I show that learning plays a role in the decision to switch majors and that major switchers respond to information from their own major. I also present evidence that learning is general and not entirely major specific.

Suggested Citation

  • Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
  • Handle: RePEc:ucp:jlabec:doi:10.1086/658091
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