Designing school choice mechanisms: A structural model and demand estimation

Zhiyi Xu and Robert G. Hammond

Economic Inquiry, 2024, vol. 62, issue 2, 505-524

Abstract: Designing the markets that allocate public school seats is a crucial policy consideration. This paper compares the design of school choice mechanisms in terms of economic efficiency, stability, and strategic behavior. We estimate demand for schools using data from a large US public school system with novel indicators of students' levels of strategic sophistication. We find important benefits of reserving a set of seats to be assigned by a pure lottery. In settings that share features in common with the school system we study, our findings suggest that non‐selective criteria such as lotteries induce a large increase in truth‐telling.

Date: 2024
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