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Beyond Truth-Telling: Preference Estimation with Centralized School Choice and College Admissions

American Economic Review 2019 109(4), 1486-1529 open access
We propose novel approaches to estimating student preferences with data from matching mechanisms, especially the Gale-Shapley deferred acceptance. Even if the mechanism is strategy-proof, assuming that students truthfully rank schools in applications may be restrictive. We show that when students are ranked strictly by some ex ante known priority index (e.g., test scores), stability is a plausible and weaker assumption, implying that every student is matched with her favorite school/college among those she qualifies for ex post. The methods are illustrated in simulations and applied to school choice in Paris. We discuss when each approach is more appropriate in real-life settings.

Identification and Estimation in Many‐to‐One Two‐Sided Matching Without Transfers

Econometrica 2024 92(3), 749-774 open access
In a setting of many‐to‐one two‐sided matching with nontransferable utilities, for example, college admissions, we study conditions under which preferences of both sides are identified with data on one single market. Regardless of whether the market is centralized or decentralized, assuming that the observed matching is stable, we show nonparametric identification of preferences of both sides under certain exclusion restrictions. To take our results to the data, we use Monte Carlo simulations to evaluate different estimators, including the ones that are directly constructed from the identification. We find that a parametric Bayesian approach with a Gibbs sampler works well in realistically sized problems. Finally, we illustrate our methodology in decentralized admissions to public and private schools in Chile and conduct a counterfactual analysis of an affirmative action policy.