TheWelfareEffectsofCoordinatedAssignment_AER
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TheWelfareEffectsofCoordinatedAssignment_AER
American Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERthe New York City High School MatchBy Atila Abdulkadiroglu. Nikhil Agarwal, and Parag a. Pathak*Coordinated single-offer school assignment systems are a popular education reform. H? show that uncoordinated offers in NYC's school assignment mechanism generated mismatches. One-third of applicants were TheWelfareEffectsofCoordinatedAssignment_AER unassigned after the main round and later administratively placed at less desirable schools. H? evaluate the effects of the new coordinated mechanismTheWelfareEffectsofCoordinatedAssignment_AER
based on deferred acceptance using estimated student preferences. The new mechanism achieves 80 percent of the possible gains from a no-choice neighbAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AEReviously administratively assigned experienced the largest gains in welfare and subsequent achievement. ( JELC1S. D82,121.128)In recent years, market design theory has inspired dramatic changes in how children are assigned to public schools across numerous American cities and around the world. The f TheWelfareEffectsofCoordinatedAssignment_AERirst new system adopted was for placing eighth graders into high schools in New York City (NYC). NYC's new system has not only received widespread sciTheWelfareEffectsofCoordinatedAssignment_AER
entific and popular acclaim (Economic Sciences Prize Committee 2012: Tullis 2014: Roth 2015). but also became a template for reforms in other cities.1American Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERy. 213 Social Sciences Building, Durham, NC 27708. and NBER (email: alila.abdulkadiroglu@dukc.edu): Agarwal: Department of Economics. MIT. 50 Memorial Drive. Cambridge. MA 02142. and NBER (email: agarwaln@mit.edu); Pathak: Department of Economics. MIT. 50 Memorial Drive. E52-426. Cambridge. MA 02139 TheWelfareEffectsofCoordinatedAssignment_AER. and NBER (email: ppathak@mit.edu). This paper was accepted to the AER under the guidance of Pinclopi Goldberg. Coeditor. We thank Neil Dorosin. JessTheWelfareEffectsofCoordinatedAssignment_AER
e Margolis. Sonali Munuka. and Elizabeth Sciabarra for their expertise and for facilitating access to the data used in this study. Special thanks to AAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AEReve Berry, Stefan Bonhomme. Eric Budish. Francesco Decarolis, Matt Gentzkow, Arda Gitmez, Jerry Hausman. Phil Haile. Hortaọsu, Peter Hull. Yusuke Narita, Derek Neal. Alex Olssen. Ariel Pakes, Amy Ellen Schwartz, Jesse Shapiro, and seminar participants at the University of Chicago. Harvard University TheWelfareEffectsofCoordinatedAssignment_AER, Federal Reserve Bank of NY. London School of Economics. Yale University, and the NBER Market Design conference for input. We received excellent reseTheWelfareEffectsofCoordinatedAssignment_AER
arch assistance from Alonso Bucarey. Red Davis, Weiwei Hu. Danielle Wcddc. and a hard-working team of MIT undergraduates. Agarwal acknowledges supportAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERl Science Foundation (grant SES-1056325). and the William T. Grant Foundation. Abdulkadiroglu and Pathak are on the Scientific Advisory Board of the Institute for Innovation in Public School Choice. The authors declare that they have no relevant or material financial interests that relate to the res TheWelfareEffectsofCoordinatedAssignment_AERearch in this paper.'Go to https://doi.org/IO.l257/acr.20l5l425 to visit the article page for additional materials and author disclosure statement(s).TheWelfareEffectsofCoordinatedAssignment_AER
1 Cities that adopted new coordinated matching systems following NYC include Camden, Denver, New Orleans. Newark, and Washington. DC.3635.Í636THE AMERAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERstem affects pupil allocation to schools or the extent to which the new system created losers as well as winners. The empirical performance of alternatives to NYC’s deferred acceptance-based scheme, the quantitative aspects of particular design trade-offs, and whether the new mechanism is associated TheWelfareEffectsofCoordinatedAssignment_AER with improvements in downstream educational outcomes also remain open questions.2Characterizing the state of the market prior to the new mechanism isTheWelfareEffectsofCoordinatedAssignment_AER
a major challenge because decentralized and uncoordinated systems do not usually generate systematic data. This paper surmounts this hurdle by exploiAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AER-offer system for allocating students to schools. Using our rich micro-data on applications, assignments, and enrollments, we describe high school student placement in both systems and assess whether students receive one of their preferred choices. Tracking students from application to assignment al TheWelfareEffectsofCoordinatedAssignment_AERlows US to comprehensively describe the drawbacks of NYC’s previous system, but still leaves unanswered questions. First, we do not know w hether theTheWelfareEffectsofCoordinatedAssignment_AER
reform realized most of the possible gains associated with a new assignment system or how those gains were distributed across applicants. Second, we kAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERur paper addresses these questions using an estimated model of student preferences exploiting the straightforward incentive feature of New York's new system.Prior to 2003. rising NYC high school students applied to live out of more than 600 school programs; they could receive multiple offers and be TheWelfareEffectsofCoordinatedAssignment_AERplaced on wait lists. Students were allowed to accept only one school and one wait list offer, and the cycle of offers and acceptances was repeated twTheWelfareEffectsofCoordinatedAssignment_AER
o more times. The vast majority of students not assigned in these rounds went through an administrative process that manually placed them at schools cAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERthis system was replaced by a single-offer assignment system, based on the student-proposing deferred acceptance algorithm (DA) for the main round. Applicants were allowed to rank up to 12 programs for enrollment in 2004-2005. and a supplementary round placed students unassigned in the main round. S TheWelfareEffectsofCoordinatedAssignment_AERince the central office coordinated all schools into a single offer, we refer to this new system as the coordinated mechanism. The mechanisms could prTheWelfareEffectsofCoordinatedAssignment_AER
oduce different allocations for three main reasons: (i) the new mechanism allows students to rank up to 12 choices, whereas the old mechanism only allAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERile waiting to be offered seats at more preferred schools after others decline: and (iii) unlike the new mechanism, the old“There is an active scholarly and policy debate about alternative designs. The OneApp process used in the Recovery School District in New Orleans is based on an entirely differe TheWelfareEffectsofCoordinatedAssignment_AERnt assignment algorithm that relaxes the stability constraint in New York’s system (Abdulkadiroịlu Ct al. 2017). Abdulkadiroglu. Che. and Yasuda (2015TheWelfareEffectsofCoordinatedAssignment_AER
) argue that ordinal strategy-proof mechanisms may not lead to improvements in cardinal utility.'Although the offer timetable and number of rounds wasAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERSSIGNMENT 3637mechanism invited strategic considerations on student ranking, as schools were able to sec the entire rank ordering of applicants in the old mechanism, and some advertised they would only consider those who ranked (hem first.Offer processing and matriculation patterns provide rich deta TheWelfareEffectsofCoordinatedAssignment_AERils on how and why the new mechanism improves on the old one. In (he old mechanism. 18.6 percent of students matriculate at schools different from theTheWelfareEffectsofCoordinatedAssignment_AER
ir assignment at the end of the match compared to 11.4 percent under the new mechanism. Multiple oilers and short rank-order lists in the old mechanisAmerican Economic Review 2OỈ7. IO7t 12): 3635-36/19 hltps://doLorg/IO.I257/(ier.20l5l425The Welfare Effects of Coordinated Assignment: Evidence from t TheWelfareEffectsofCoordinatedAssignment_AERt round offer, and 59 percent of these applicants are administratively assigned. The take-up rales for administratively-assigned students are similar across mechanisms, but the number of students assigned in that round is three limes larger in the old mechanism. In addition. 8.5 percent of applicant TheWelfareEffectsofCoordinatedAssignment_AERs left the district after assignment in the old mechanism while only 6.4 percent left under the new mechanism. While these observations suggest welfarTheWelfareEffectsofCoordinatedAssignment_AER
e improvements, it is nevertheless necessary to estimate a model of school demand to quantify the distribution of student welfare effects and the releGọi ngay
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