Correlation neglect in student-to-school matching
- American Economic Journal: Microeconomics
- 16(3), Aug, 2024: p.1-42
This paper presents results from three incentivized experiments on school choice scenarios, examining how correlation in admissions decisions affects student application strategies. When schools’ assessments of students are based on a common priority, inducing correlation, students’ strategies decline in quality: applications become more aggressive and fail to include attractive “safety” options. A battery of tests suggests that this phenomenon is at least partially driven by correlation neglect, where students underestimate the impact of correlated outcomes. The findings have significant implications for the design and deployment of student-to-school matching mechanisms, highlighting the need to account for behavioral biases in educational policy and admissions systems. Authors present results from three experiments containing incentivized school choice scenarios. In these scenarios, we vary whether schools' assessments of students are based on a common priority (inducing correlation in admissions decisions) or are based on independent assessments (eliminating correlation in admissions decisions). The quality of students' application strategies declines in the presence of correlated admissions: application strategies become substantially more aggressive and fail to include attractive "safety" options. We provide a battery of tests suggesting that this phenomenon is at least partially driven by correlation neglect, and we discuss implications for the design and deployment of student-to-school matching mechanisms.- Reproduced