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Designing School Choice Mechanisms: A Structural Model and Demand Estimation

Zhiyi (Alicia) Xu and Robert G. Hammond
Economic Inquiry
December 2023

Designing the markets that allocate public school seats is an important policy consideration. In “Designing School Choice Mechanisms: A Structural Model and Demand Estimation,” Manager Zhiyi (Alicia) Xu and co-author Robert G. Hammond compare the design of school choice mechanisms in terms of economic efficiency, stability, and strategic behavior. Using data from a large US public school system with novel indicators of whether a student acted strategically in the application process, they estimate demand for schools and find benefits to reserving a set of seats to be assigned by a pure lottery. In settings that share features in common with the school system in this study, these findings suggest that non-selective criteria such as lotteries would encourage applicants to submit their true preferences in the application.

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