Updating Human Capital Decisions: Evidence from SAT Score Shocks and College Applications

42 Pages Posted: 27 Feb 2016 Last revised: 2 Aug 2016

See all articles by Timothy Bond

Timothy Bond

Purdue University - Department of Economics

George Bulman

University of California, Santa Cruz - Department of Economics

Xiaoxiao Li

Purdue University - Department of Economics

Jonathan Smith

Georgia State University

Date Written: June 30, 2016

Abstract

We estimate whether students update their college application portfolios in response to large, unanticipated information shocks generated by the release of SAT scores -- a primary component of admissions decisions. Exploiting new population data on the timing of college selection and a policy that induces students to choose colleges prior to taking exam, we find that the release of scores causes students to update their portfolios in terms of selectivity, tuition, and sector. However, the magnitude of updating is too modest to significantly reduce unexplained variation across students, suggesting that non-academic factors may be the dominant determinants of college choice.

Keywords: learning, aptitude, SAT

JEL Classification: J24, I2, D83

Suggested Citation

Bond, Timothy and Bulman, George and Li, Xiaoxiao and Smith, Jonathan, Updating Human Capital Decisions: Evidence from SAT Score Shocks and College Applications (June 30, 2016). Available at SSRN: https://ssrn.com/abstract=2738204 or http://dx.doi.org/10.2139/ssrn.2738204

Timothy Bond (Contact Author)

Purdue University - Department of Economics ( email )

West Lafayette, IN 47907-1310
United States

George Bulman

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States

Xiaoxiao Li

Purdue University - Department of Economics ( email )

West Lafayette, IN 47907-1310
United States

Jonathan Smith

Georgia State University ( email )

GA
United States

HOME PAGE: http://https://sites.google.com/site/jonathansmithphd/

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