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Updating Human Capital Decisions: Evidence from SAT Score Shocks and College Applications

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  • Bond, Timothy N.
  • Bulman, George
  • Li, Xiaoxiao
  • Smith, Jonathan

Abstract

We estimate whether students update their collegepplication portfolios in response to large, unanticipated information shocks generated by the release of SAT scores -- a primary component of admissions decisions. Exploiting new population data on the timing of college selection and a policy that induces students to choose colleges prior to taking exam, we find that the release of scores causes students to update their portfolios in terms of selectivity, tuition, and sector. However, the magnitude of updating is too modest to significantly reduce unexplained variation across students, suggesting that non-academic factors may be the dominant determinants of college choice.

Suggested Citation

  • Bond, Timothy N. & Bulman, George & Li, Xiaoxiao & Smith, Jonathan, 2016. "Updating Human Capital Decisions: Evidence from SAT Score Shocks and College Applications," MPRA Paper 72497, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:72497
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    Cited by:

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    2. Joshua Goodman & Oded Gurantz & Jonathan Smith, 2020. "Take Two! SAT Retaking and College Enrollment Gaps," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 115-158, May.
    3. Jonathan Smith, 2018. "The Sequential College Application Process," Education Finance and Policy, MIT Press, vol. 13(4), pages 545-575, Fall.
    4. Johannes S. Kunz & Kevin E. Staub, 2016. "Subjective completion beliefs and the demand for post-secondary education," Economics of Education Working Paper Series 0120, University of Zurich, Department of Business Administration (IBW).
    5. Deborah A. Cobb-Clark & Tiffany Ho & Nicolás Salamanca, 2021. "Parental Responses to Children’s Achievement Test Results," Melbourne Institute Working Paper Series wp2021n17, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    6. Ribas, Rafael P. & Sampaio, Breno & Trevisan, Giuseppe, 2020. "Short- and long-term effects of class assignment: Evidence from a flagship university in Brazil," Labour Economics, Elsevier, vol. 64(C).
    7. Kunz, Johannes S. & Staub, Kevin E., 2020. "Early subjective completion beliefs and the demand for post-secondary education," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 34-55.
    8. Michael D. Bloem & Weixiang Pan & Jonathan Smith, 2021. "College entrance exam‐taking strategies in Georgia," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 587-627, October.
    9. Christopher D. Blake & Danna Kang Thomas & Joshua Hess, 2024. "Higher education: The impact of recreational marijuana on college applications," Contemporary Economic Policy, Western Economic Association International, vol. 42(2), pages 259-277, April.
    10. Arcidiacono, Peter & Kinsler, Josh & Ransom, Tyler, 2022. "Recruit to reject? Harvard and African American applicants," Economics of Education Review, Elsevier, vol. 88(C).
    11. Posso, Christian & Saravia, Estefanía & Uribe, Pablo, 2023. "Acing the test: Educational effects of the SaberEs test preparation program in Colombia," Economics of Education Review, Elsevier, vol. 97(C).

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    More about this item

    Keywords

    college choice; learning; SAT;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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