Quantitative Economics: Nov, 2024, Volume 15, Issue 4

Purchasing Seats in School Choice and Inequality

https://doi.org/10.3982/QE2220
p. 1151-1195

Tong Wang|Congyi Zhou

We study a mechanism that gives students the option of paying higher tuition to attend their preferred schools. This seat‐purchasing mechanism is neither strategyproof nor stable. Our paper combines administrative and survey data to estimate students' preferences and conducts welfare analysis. We find that changing from a deferred acceptance mechanism to the cadet‐optimal stable mechanism reduces students' welfare but that adopting the observed seat‐purchasing mechanism alleviates this welfare loss. Moreover, students from affluent communities prefer to pay higher tuition to stay at preferred schools, while those from less affluent communities are more likely be priced out to lower‐quality schools.

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Supplemental Material

Supplement to "Purchasing Seats in School Choice and Inequality"

Tong Wang and Congyi Zhou

This online appendix contains material not found within the manuscript.

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Supplement to "Purchasing Seats in School Choice and Inequality"

Tong Wang and Congyi Zhou

The replication package for this paper is available at https://doi.org/10.5281/zenodo.12735964. The authors were granted an exemption to publish parts of their data because either access to these data is restricted or the authors do not have the right to republish them. Therefore, the replication package only includes the codes and the parts of the data that are not subject to the exemption. However, the authors provided the Journal with (or assisted the Journal to obtain) temporary access to the restricted data. The Journal checked the provided and restricted data and the codes for their ability to reproduce the results in the paper and approved online appendices. Given the highly demanding nature of the algorithms, the reproducibility checks were run on a simplified version of the code, which is also available in the replication package.

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