A school choice mechanism from Taiwan, by Dur, Pathak, Song and Sönmez

Deduction Dilemmas: The Taiwan Assignment Mechanism

Umut M. Dur, Parag A. Pathak, Fei Song, Tayfun Sönmez

NBER Working Paper No. 25024
Issued in September 2018
NBER Program(s):Economics of Education, Labor Studies 

This paper analyzes the properties of the Taiwan mechanism, used for high school placement nationwide starting in 2014. In the Taiwan mechanism, points are deducted from an applicant's score with larger penalties for lower ranked choices. Deduction makes the mechanism a new hybrid between the well-known Boston and deferred acceptance mechanisms. Our analysis sheds light on why Taiwan's new mechanism has led to massive nationwide demonstrations and why it nonetheless still remains in use.

 "Loosely  speaking,  in  Taiwan’s deduction system, a students priority is reduced based on the order in which preferences are ranked.  Table 1 lists the schedule of points employed in 2014 across the largest districts in Taiwan.  For instance, in Jibei, the largest district with over 60,000 applicants, a student’s score at her second choice is reduced by 1, the score at her third choice is reduced by 2, and so on.  In Yunlin district, no points are deducted for the first four choices, and 2 points are 3 deducted from choices five through eight. The deduction system has now been in place for the last five years, from 2014-2018."

This system of deductions is used to determine each student's priority at each school, and allocations are then determined, by a deferred acceptance algorithm, based on student preferences and these school priorities.