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Determinants of college major choice: identification using an information experiment

  • Wiswall, Matthew


    (Arizona State University)

  • Zafar, Basit

    (Federal Reserve Bank of New York)

This paper studies the determinants of college major choice using an experimentally generated panel of beliefs, obtained by providing students with information on the true population distribution of various major-specific characteristics. Students logically revise their beliefs in response to the information, and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability. We estimate a rich model of college major choice using the panel of beliefs data. While expected earnings and perceived ability are a significant determinant of major choice, heterogeneous tastes are the dominant factor in the choice of major. Analyses that ignore the correlation in tastes with earnings expectations inflate the role of earnings in college major choices. We conclude by computing the welfare gains from the information experiment and find positive average welfare gains.

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Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 500.

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Length: 64 pages
Date of creation: 2011
Date of revision: 01 Aug 2014
Handle: RePEc:fip:fednsr:500
Note: For a published version of this report, see Matthew Wiswall and Basit Zafar, "Determinants of College Major Choice: Identification Using an Information Experiment," Review of Economic Studies 82, no. 2 (April 2015): 791-824.
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