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Biased Beliefs and the Dynamic Role of Information
in College Choice

Magdalena Bennett          Claudia Allende

The University of Texas at Austin           Stanford University      


AEFP #EdDev Group
February 25, 2022

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Motivation

  • Information frictions affect optimal human capital investment decisions
2 / 19

Motivation

  • Information frictions affect optimal human capital investment decisions

What major to study?

2 / 19

Motivation

  • Information frictions affect optimal human capital investment decisions

What major to study?

Should I go to grad school or not?

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Motivation

  • Information frictions affect optimal human capital investment decisions

What major to study?

Should I go to grad school or not?

Enroll in that training program?

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Motivation

  • Information frictions affect optimal human capital investment decisions

What major to study?

Should I go to grad school or not?

Enroll in that training program?

  • Most interventions target static component

    • Choice set is fixed
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Dynamic component?

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This Study

  • Research Question: How do information frictions affect students with respect to higher education decisions (dynamic vs static role).

    • Investment in test preparation
    • Choices in major-institution enrollment
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This Study

  • Research Question: How do information frictions affect students with respect to higher education decisions (dynamic vs static role).

    • Investment in test preparation
    • Choices in major-institution enrollment

  • Setting: Chilean centralized higher education system

    • Students apply with an admission score and get selected through a DA mechanism.
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This Study

  • Research Question: How do information frictions affect students with respect to higher education decisions (dynamic vs static role).

    • Investment in test preparation
    • Choices in major-institution enrollment

  • Setting: Chilean centralized higher education system

    • Students apply with an admission score and get selected through a DA mechanism.

  • Population: Students that took the admission tests in late 2021 but did not enroll in higher ed.

4 / 19

This Study

  • Research Question: How do information frictions affect students with respect to higher education decisions (dynamic vs static role).

    • Investment in test preparation
    • Choices in major-institution enrollment

  • Setting: Chilean centralized higher education system

    • Students apply with an admission score and get selected through a DA mechanism.

  • Population: Students that took the admission tests in late 2021 but did not enroll in higher ed.

  • Partnering with Ministry of Education and ConsiliumBots.

4 / 19

This Study

  • 3-arm RCT with personalized information delivered via email and Whatsapp.

    • Dynamic group: Early provision of personalized information (April)

    • Static group: Provision of personalized information after the admission test but before applying (December)

    • Control group: General information.

5 / 19

This Study

  • 3-arm RCT with personalized information delivered via email and Whatsapp.

    • Dynamic group: Early provision of personalized information (April)

    • Static group: Provision of personalized information after the admission test but before applying (December)

    • Control group: General information.

  • Baseline survey to capture preferences and additional information.

  • Follow-up surveys to capture test preparation throughout the year.

  • Administrative data from the Ministry of Education.

5 / 19

Intervention: Dynamic Group

Personalized information including:

  • Previous scores
  • Preferences (if applied + survey)
  • Preparation material
  • Financial Aid information
  • Relevant dates
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Intervention: Dynamic Group

  • List of major-institutions by cutoff score according to area of interest.

  • Information about cutoff scores and how much they need to improve to achieve it.




Note: These are not the actual pamphlets that are going out

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Intervention: Dynamic Group

  • List of major-institutions by cutoff score according to area of interest.

  • Information about cutoff scores and how much they need to improve to achieve it.




Note: These are not the actual pamphlets that are going out

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Intervention: Dynamic Group

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Intervention: Dynamic Group

  • Additional information about financial aid

  • (Potentially) adds information about technical schools

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Intervention: Static Group and Control

  • Sent after admission test is completed and before applications.

  • Similar to dynamic group, but no nudge about increasing scores.

  • Control group receives general information.

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Study Population

  • Students that took all the required tests but did not enroll in higher education (over 80,000 students).
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Study Population

  • Students that took all the required tests but did not enroll in higher education (over 80,000 students).

  • Heterogeneous group: Different reasons for not enrolling.

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Study Population

  • Students that took all the required tests but did not enroll in higher education (over 80,000 students).

  • Heterogeneous group: Different reasons for not enrolling.

  • Test score differences, but not the whole story

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Test Score Distributions

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Reasons for Not Enrolling?

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Score Gap by Reasons for Not Enrolling

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Information about Financial Aid is a Relevant Issue

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... And Students Don't Seem to Know Much About It.

  • Most students think they are eligible for Free Higher Education, but most are very unsure.

  • High uncertainty (or incongruity) on how to finance higher education.

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Next Steps

  • Currently designing brochure for intervention

    • Baseline survey out in March + Early intervention in April
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Next Steps

  • Currently designing brochure for intervention

    • Baseline survey out in March + Early intervention in April

  • Important component is general equilibrium effects

    • How would this intervention scale up?
18 / 19

Biased Beliefs and the Dynamic Role of Information
in College Choice

Magdalena Bennett - Claudia Allende

19 / 19

Motivation

  • Information frictions affect optimal human capital investment decisions
2 / 19
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