Economics Research Seminar Series: Lisa Botbol

Lisa Botbol UNSW Sydney 

Topic

Asymmetric Information Sharing in Oligopoly: A Natural Experiment in Retail Gasoline

abstract

School socioeconomic segregation is prevalent worldwide, with disadvantaged students often attending lower-quality schools. A common mitigation strategy is affirmative action in school admissions for low-socioeconomic status (SES) students. This paper examines a 2016 Chilean reform that centralized primary school applications, eliminated selective admissions from private schools, and introduced priorities for low-SES students. We analyze the reform's impact on educational inequalities through its sequential implementation. Our findings indicate that the reform did not reduce school segregation nor increase quality for low-SES students. To understand this outcome, we estimate a demand model using students' rank-ordered application lists. We allow for important heterogeneity in preferences both in terms of observables and unobservables. We discover significant demand heterogeneity across SES groups, partly explaining why low- and high-SES students apply to different schools. Moreover, students often rank too few schools, limiting the reform's effectiveness by leaving many unassigned and ultimately enrolled in less desirable schools regardless of priority status. Our counterfactual results indicate that increasing the number of schools ranked could significantly improve outcomes for low-SES students and decrease the percentage of unassigned students that fail to benefit from the reform.