An Empirical Analysis of College Admissions with Endogenous Entrance Exam Scores

Abstract

This paper develops a method for identifying and estimating student preferences in centralized matching mechanisms when students are ranked by exam scores. In such mechanisms, exam scores contain important information for inferring students' heterogeneous preferences because students have incentives to choose their effort levels to obtain a score that maximizes their total gain in the admissions process. I show that ignoring the information embedded in effort choices causes biased estimates in Turkey where there is empirical evidence that students respond to the preparation incentives. I discuss the objectives of these mechanisms and suggest relevant policies to increase students' welfare.

Keywords: School Choice, Centralized College Admissions, Preference Estimation, Endogenous Exam Scores

JEL Classification: C57, C78, D02