Student Portfolios and the College Admissions Problem
We develop a decentralized Bayesian model of college admissions with two ranked colleges, heterogeneous students and two realistic match frictions: students find it costly to apply to college, and college evaluations of their applications are uncertain. Students thus face a portfolio choice problem in their application decision, while colleges choose admissions standards that act like market-clearing prices. Enrollment at each college is affected by the standards at the other college through student portfolio reallocation. In equilibrium, student-college sorting may fail: weaker students sometimes apply more aggressively, and the weaker college might impose higher standards. Applying our framework, we analyze affirmative action, showing how it induces minority applicants to construct their application portfolios as if they were majority students of higher caliber.
|Date of creation:||2014|
|Publication status:||Published in The Review of Economic Studies|
|Contact details of provider:|| Postal: Littauer Center, Cambridge, MA 02138|
Web page: http://www.economics.harvard.edu/
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- Groen, Jeffrey A. & White, Michelle J., 2004. "In-state versus out-of-state students: the divergence of interest between public universities and state governments," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1793-1814, August.
- Christopher Avery & Jonathan Levin, 2010.
"Early Admissions at Selective Colleges,"
American Economic Review,
American Economic Association, vol. 100(5), pages 2125-2156, December.
- Christopher Avery & Jonathan D. Levin, 2009. "Early Admissions at Selective Colleges," NBER Working Papers 14844, National Bureau of Economic Research, Inc.
- Christopher Avery & Jonathan Levin, 2009. "Early Admission at Selective Colleges," Discussion Papers 08-031, Stanford Institute for Economic Policy Research.
- Caroline Hoxby & Christopher Avery, 2013. "The Missing "One-Offs": The Hidden Supply of High-Achieving, Low-Income Students," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 1-65.
- Caroline M. Hoxby & Christopher Avery, 2012. "The Missing "One-Offs": The Hidden Supply of High-Achieving, Low Income Students," NBER Working Papers 18586, National Bureau of Economic Research, Inc.
- Hoxby, Caroline M. & Avery, Christopher, 2015. "The Missing "One-Offs": The Hidden Supply of High-Achieving, Low Income Students," Research Papers 3323, Stanford University, Graduate School of Business.
- Dennis Epple & Richard Romano & Holger Sieg, 2006. "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," Econometrica, Econometric Society, vol. 74(4), pages 885-928, July.
- Dennis Epple & Richard Romano & Holger Sieg, "undated". "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," GSIA Working Papers 2003-04, Carnegie Mellon University, Tepper School of Business.
- Eric P. Bettinger & Bridget Terry Long & Philip Oreopoulos & Lisa Sanbonmatsu, 2009. "The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment," NBER Working Papers 15361, National Bureau of Economic Research, Inc.
- Christopher Avery & Thomas J. Kane, 2004. "Student Perceptions of College Opportunities. The Boston COACH Program," NBER Chapters,in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 355-394 National Bureau of Economic Research, Inc.
- Christopher N. Avery & Mark E. Glickman & Caroline M. Hoxby & Andrew Metrick, 2013. "A Revealed Preference Ranking of U.S. Colleges and Universities," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 425-467.
- Christopher Avery & Mark Glickman & Caroline Hoxby & Andrew Metrick, 2004. "A Revealed Preference Ranking of U.S. Colleges and Universities," NBER Working Papers 10803, National Bureau of Economic Research, Inc.
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