School choice, school quality, and student performance

 School choice, which allows children to move away from neighborhood schools, doesn't by itself improve school quality, although it may allow under-performing schools to become smaller, which may make them easier to fix, or to close.

Here are two  recent assessments of two different transportation options available to Boston public school students. Both conclude that school quality matters.

The first is an op-ed in the Boston Globe saying that school choice among Boston public schools has led to too much transportation and not enough innovation. (One of the authors, Parag Pathak, played a critical role in designing  Boston's current school choice system.)

Boston needs to reexamine school assignment system
Rather than investing in high-cost travel to send students to schools across the city, Boston should consider redirecting those funds toward improving schools close to home.
By Joshua Angrist, Parag Pathak and Amanda Schmidt 

"Boston’s school assignment system has changed considerably since the 1970s. Busing today is voluntary: Students can choose to attend schools far from where they live as well as a range of neighborhood schools. This choice allows historically disadvantaged students to attend schools with more peers of different backgrounds, an option that many choose. Roughly three-quarters of students opted to enroll in non-neighborhood schools in the 2000s and 2010s. A recent study by our organization, MIT Blueprint Labs, shows that today’s assignment system works in the sense of facilitating integration.

However, the costs of the current system are high. Among the 100 US school districts with the highest enrollment, Boston maintains the greatest per-student transportation costs in the country. As of 2021, the city spent over $2,000 per student on travel, equivalent to 8 percent of per-pupil school spending.

Furthermore, the educational gains afforded by district-wide choice are less clear than the integration gains. Our research, which uses credible, randomized methods designed by Blueprint Labs to gauge the causal effect of enrollment at different types of schools, paints a nuanced picture of the benefits of travel to non-neighborhood schools. Black and Hispanic students who travel to a non-neighborhood school have more white and Asian peers than they otherwise would. But travel does not impact learning as measured by MCAS scores, high school graduation rates, or college enrollment. We argue that this is because in the current BPS choice system — unlike the separate and unequal system of 1974 — the schools students travel to are no better than those nearby.

...

"The vast sums that now go to cross-neighborhood transportation might be better spent. The city might instead invest in programs with proven educational benefits. Saga Education’s effective high-dosage tutoring program, for example, cost just $1,800 per student in 2023. This spending may do more to close racial achievement gaps than non-neighborhood assignment.

"Some might counter that choice is intrinsically valuable and that neighborhood schools are likely to be more segregated than the schools that many historically disadvantaged families choose today. These undeniable benefits must be weighed, however, against alternative uses of the money that flows to busing. Boston schools have improved greatly since 1974: Dropout rates for all students have declined, and gaps by race, while still present, have narrowed. School assignment plans originating in 1974 may therefore be less useful today. It’s time to consider changing transportation policy in light of these changes in the city’s education landscape."

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Here's a paper, about a different transportation program available to some* Boston students, which takes them out of Boston to schools in neighboring towns and cities in the metropolitan area.  Moving to those suburban schools apparently improves student performance more than moving from one Boston school to another.

 Busing to Opportunity? The Impacts of the METCO Voluntary School Desegregation Program on Urban Students of Color  by Elizabeth Setren, NBER Working Paper 32864, DOI 10.3386/w32864, August 2024

Abstract: School assignment policies are a key lever to increase access to high performing schools and to promote racial and socioeconomic integration. For over 50 years, the Metropolitan Council for Educational Opportunity (METCO) has bussed students of color from Boston, Massachusetts to relatively wealthier and predominantly White suburbs. Using a combination of digitized historical records and administrative data, I analyze the short and long run effects of attending a high-performing suburban school for applicants to the METCO program. I compare those with and without offers to enroll in suburban schools. I use a two-stage least squares approach that utilizes the waitlist assignment priorities and controls for a rich set of characteristics from birth records and application data. Attending a suburban school boosts 10th grade Math and English test scores by 0.13 and 0.21 standard deviations respectively. The program reduces dropout rates by 75 percent and increases on-time high school graduation by 13 percentage points. The suburban schools increase four-year college aspirations by 17 percentage points and enrollment by 21 percentage points. Participation results in a 12 percentage point increase in four-year college graduation rates. Enrollment increases average earnings at age 35 by $16,250. Evidence of tracking to lower performing classes in the suburban schools suggests these effects could be larger with access to more advanced coursework. Effects are strongest for students whose parents did not graduate college."

*"The program is very popular: 50 percent of Black youth in Boston applied and 20 percent of Latinx youth in the past 20 years"

...

"After demonstrating the comparability of students with and without offers, I estimate the impact of receiving an offer to the program and the impact of participating in the program. Offers to enroll in suburban districts serve as instrumental variables and all models control for approximate waitlist position using age at the time of application, gender, and race controls. Therefore the estimates compare the outcomes of those who enroll in METCO to applicants with similar demographics, who applied at similar times, but did not enroll because they were not selected from the waitlist."

What preferences are revealed by market designs? by Oğuzhan Çelebi (who is on the job market)

Oğuzhan Çelebi is on the job market this year (listed on the job market websites of both MIT and Stanford where he's finishing a two year postdoc). He has a new paper that takes a really novel approach to market design.  It looks at the implicit preference relation (if one exists) that a mechanism reveals when a revealed preference analysis is done of the choices it makes from different possible menus of alternatives. The specific focus is on preferences for diversity revealed by mechanisms used in connection with affirmative action.

Diversity Preferences and Affirmative Action, by Oğuzhan Çelebi 

Abstract: "In various contexts, institutions allocate resources using rules that determine selections given the set of candidates. Many of these rules feature affirmative action, accounting for both identity and (match) quality of individuals. This paper studies the relationship between these rules and the preferences underlying them. I map the standard setting of market design to the revealed preference framework, interpreting choice rules as observed choices made across different situations. I provide a condition that characterizes when a rule can be rationalized by preferences based on identities and qualities. I apply tests based on this condition to evaluate real-world mechanisms, including India’s main affirmative action policy for allocating government jobs, and find that it cannot be rationalized. When identities are multidimensional, I show that non-intersectional views of diversity can be exploited by dominant groups to increase their representation and cause the choice rules to violate the substitutes condition, a key requirement for the use of stable matching mechanisms. I also characterize rules that can be rationalized by preferences separable in diversity and quality, demonstrating that they lead to a unique selection within the broader set of policies that reserve places based on individuals’ identities."

########

He's a target of opportunity for any department interested in market design.

Crowding in School Choice, By William Phan, Ryan Tierney, and Yu Zhou

 Here's an innovative paper in the latest AER.

The authors use North Carolina's Wake County Public School System as a motivating example of crowding and the information available to parents about crowding.

Crowding in School Choice, By William Phan, Ryan Tierney, and Yu Zhou, American Economic Review 2024, 114(8): 2526–2552, https://doi.org/10.1257/aer.20220626

Abstract: "We consider the market design problem of matching students to schools in the presence of crowding effects. These effects are salient in parents’ decision-making and the empirical literature; however, they cause difficulties in the design of satisfactory mechanisms and, as such, are not currently considered. We propose a new framework and an equilibrium notion that accommodates crowding, no-envy, and respect for priorities. The equilibrium has a student-optimal element that induces an incentive-compatible mechanism and is implementable via a novel algorithm. Moreover, analogs of fundamental structural results of the matching literature (the rural hospitals theorem, welfare lattice, etc.) survive."

"In our model, each student has a preference over the two dimensions of school identity and the total amount of educational resources that they consume at each school. The more crowded a school is, the fewer resources each student enjoys, and so the value of this second dimension at each school will emerge endogenously. 

...

"We propose a new equilibrium concept: rationing crowding equilibrium (RCE). The core of our innovation is in realizing that the vector of resource levels can function like a price. Consider a competitive solution applied in our context. We may imagine that an auctioneer announces a resource vector, which then determines a (finite) list of school and resource-level pairs. Each student will then demand (generically) one of these pairs, and we can ask the usual market clearing question: Does there exist a resource vector at which, for each school, the demand for educational resources is equal to its supply? We show that the answer is yes, if we allow for an error of at most one seat.9,10 Since each student faced the same budget set, the resulting allocation satisfies no-envy, at least for schools that have not reached their enrollment cap

YingHua He 何 英华 has died.

 Yan Chen passes on the devastating news that YingHua He 何 英华 passed away on Tuesday night, after struggling with kidney cancer.

May his memory be a blessing.

He graduated from college in China in 2001, got an MA at Peking University, received his Ph.D. at Columbia in 2011, taught in Toulouse, and was an associate professor at Rice University when he died.

Here's his CV, and here is his Google Scholar page.  He did important work on market design, including on school choice and kidney exchange.

He was one of the pioneers of empirical market design, combining econometrics with matching theory. 

He had many friends, and I was lucky to be among them. Here's a photo I took of him giving a seminar at Stanford, when he was a visiting scholar in 2014-15

Yinghua He at Stanford, January 2015

Here are some of my blog posts on his work:

Tuesday, January 25, 2022

Multiple offer mechanisms in school choice, when information gathering is costly

Sunday, November 6, 2022

Limiting congestion by limiting applications, or making them costly

Sunday, September 13, 2020

A proposal for non-simultaneous kidney exchange in pairs and chains and with deceased donors...

Friday, May 24, 2019

Matching early when information is costly, by Grenet, He, and Kübler

Fairness, efficiency and strategy proofness in assigning indivisible objects: two new papers

 Here are two new papers on the burgeoning literature of matching people to scarce indivisible resources.

First, an experiment by Claudia Cerrone, Yoan Hermstrüwer,  and Onur Kesten.

Claudia Cerrone, Yoan Hermstrüwer, Onur Kesten, School Choice with Consent: an Experiment, The Economic Journal, Volume 134, Issue 661, July 2024, Pages 1760–1805,   https://doi.org/10.1093/ej/uead120

Abstract: Public school choice often yields student assignments that are neither fair nor efficient. The efficiency-adjusted deferred acceptance mechanism allows students to consent to waive priorities that have no effect on their assignments. A burgeoning recent literature places the efficiency-adjusted deferred acceptance mechanism at the centre of the trade-off between efficiency and fairness in school choice. Meanwhile, the Flemish Ministry of Education has taken the first steps to implement this algorithm in Belgium. We provide the first experimental evidence on the performance of the efficiency-adjusted deferred acceptance mechanism against the celebrated deferred acceptance mechanism. We find that both efficiency and truth-telling rates are higher under the efficiency-adjusted deferred acceptance mechanism than under the deferred acceptance mechanism, even though the efficiency-adjusted deferred acceptance mechanism is not strategy proof. When the priority waiver is enforced, efficiency further increases, while truth-telling rates decrease relative to variants of the efficiency-adjusted deferred acceptance mechanism where students can dodge the waiver. Our results challenge the importance of strategy proofness as a prerequisite for truth telling and portend a new trade-off between efficiency and vulnerability to preference manipulation.

##########

And here's a theoretical paper by Xiang Han (韩翔)

Xiang Han, On the efficiency and fairness of deferred acceptance with single tie-breaking, Journal of Economic Theory, Volume 218, 2024, https://doi.org/10.1016/j.jet.2024.105842. (https://www.sciencedirect.com/science/article/pii/S0022053124000486)

Abstract: As a random allocation rule for indivisible object allocation under weak priorities, deferred acceptance with single tie-breaking (DA-STB) is not ex-post constrained efficient. We first observe that it also fails to satisfy equal-top fairness, which requires that two agents be assigned their common top choice with equal probability if they have equal priority for it. Then, it is shown that DA-STB is ex-post constrained efficient, if and only if it is equal-top fair, if and only if the priority structure satisfies a certain acyclic condition. We further characterize the priority structures under which DA-STB is ex-post stable-and-efficient. Based on the characterized priority domains, and using a weak fairness notion called local envy-freeness, new theoretical support is provided for the use of this rule: for any priority structure, among the class of strategy-proof, ex-post stable, symmetric, and locally envy-free rules, each of the above desiderata—ex-post constrained efficiency, ex-post stability-and-efficiency, and equal-top fairness—can be achieved if and only if it can be achieved by DA-STB.

Centralized assignment mechanisms that don't include all the relevant choices, by Kapor, Karnani and Neilson in the JPE

 One of the issues in organizing a centralized matching mechanism is to make the market thick, by including all or most of the relevant choices in the centralized system.  If not, there will be transactions outside of the centralized marketplace, and some of them may be costly to the system.

Here's a paper that explores that in the context of  college admissions in Chile.

Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms, by Adam Kapor, Mohit Karnani, and Christopher Neilson, Journal of Political Economy, forthcoming.

Abstract: "We study the welfare and human capital impacts of colleges’ (non)participation in Chile’s centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, offers, wait lists, matriculation, and graduation. When the platform expands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds."

"in virtually every practical implementation there exist many off-platform options that are available to participants of the match. In primary and secondary education, these include private schools or charter schools that do not participate in the centralized system. In other cases, such as higher education, some providers may be excluded from the platform by regulation, while others may choose not to participate. When off-platform options exist, applicants may renege on their assigned matches in favor of programs that did not participate in the centralized process. In turn, these decisions lead to the use of wait lists and aftermarkets, which may be inefficient due to the presence of congestion and matching frictions and can be inequitable if some students are better able to navigate this partially decentralized process, negating some of the benefits of the match.

"In this paper, we study the empirical relevance of the configuration of on- and off-platform options for students’ welfare and for persistence and graduation in higher-education programs. We document the importance of negative externalities generated by off-platform options and quantify a measure of aftermarket frictions that contribute to generating them in practice. Our empirical application uses data from the centralized assignment system for higher education in Chile, which has one of the world’s longest-running college assignment mechanisms based on the deferred-acceptance (DA) algorithm.2 We take advantage of a recent policy change that increased the number of on-platform institutions from 25 to 33, raising the number of available slots by approximately 40%. We first present an analysis of the policy, which shows that when these options are included on the centralized platform, students start college sooner, are less likely to drop out, and are more likely to graduate within 7 years. Importantly, these effects are larger for students from lower-socioeconomic-status (SES) backgrounds, suggesting that the design of platforms can have effects on both efficiency and equity.

...

"We find that when students are allowed to express their preferences for a larger variety of options on the platform, welfare increases substantially, as does the share of students graduating on time.

...

"Intuitively, when a desirable program is not on the platform, it can cause some students who would have placed in that program to instead receive a placement in a different program available on the platform. These students may then decline that placement in favor of the off-platform program, creating vacancies that in turn lead to increased reliance on wait lists, which may be subject to frictions. Moreover, the absence of a particular program may distort the placements of other students, even if the students whose placements are affected would never enroll in that program. These students may also be less satisfied and more likely to decline their placement.

"Taken together, our results show empirically that the existence of off-platform options affects the equity and efficiency of centralized assignment systems. "

############

Earlier (with some links to still earlier papers):

Monday, May 9, 2022

School choice with outside options , by Akbarpour, Kapor, Neilson, van Dijk, and Zimmerman in J.Pub.E.

Interviews with school choice stakeholders

 Here's a paper about school choice in New Orleans, organized around interviews with New Orleans "Experts and Administrators" on the one hand and "Activists and Educators" on the other. 

Akchurin, Maria, and Gabriel Chouhy. "Designing Better Access to Education? Unified Enrollment, School Choice, and the Limits of Algorithmic Fairness in New Orleans School Admissions." Qualitative Sociology (2024): 1-43.

Abstract: "Economic sociologists have long recognized that markets have moral dimensions, but we know less about how everyday moral categories like fairness are reconciled with competing market principles like efficiency, especially in novel settings combining market design and algorithmic technologies. Here we explore this tension in the context of education, examining the use of algorithms alongside school choice policies. In US urban school districts, market design economists and computer scientists have applied matching algorithms to build unified enrollment (UE) systems. Despite promising to make school choice both fair and efficient, these algorithms have become contested. Why is it that algorithmic technologies intended to simplify enrollment and create a fairer application process can instead contribute to the perception they are reproducing inequality? Analyzing narratives about the UE system in New Orleans, Louisiana, USA, we show that experts designing and implementing algorithm-based enrollment understand fairness differently from the education activists and families who use and question these systems. Whereas the former interpret fairness in narrow, procedural, and ahistorical terms, the latter tend to evaluate fairness with consequentialist reasoning, using broader conceptions of justice rooted in addressing socioeconomic and racial inequality in Louisiana, and unfulfilled promises of universal access to quality schools. Considering the diffusion of “economic styles of reasoning” across local public education bureaucracies, we reveal how school choice algorithms risk becoming imbued with incommensurable meanings about fairness and justice, compromising public trust and legitimacy. The study is based on thirty interviews with key stakeholders in the school district’s education policy field, government documents, and local media sources."

"Designing and implementing algorithm-based UE systems entails complex moral and political considerations, including questions about how to operationalize what is fair when giving priority to some students over others. The designers and supporters of these systems argue that, by automating and randomizing assignments to oversubscribed schools, UE algorithms are not only efficient, but also impartial and, therefore, value-neutral. Yet as policy instruments, their use is explicitly predicated on normative grounds: centralized enrollment platforms seek to make choice more transparent and fair, which in practice means weakening the influence of social privileges in access to educational opportunities. But even if UE systems constitute powerful technologies that deliver simple and efficient enrollment across the board, providing greater access to school choice, is it possible that they still end up eroding public trust and contributing to the perception they are reproducing inequality? And if so, why?

,,,

"We argue that a crucial reason why technically irreproachable policy instruments like UE algorithms may fall short of eliciting sufficient moral consensus and become enmeshed in political disputes is that core values like fairness are defined and interpreted differently across the contexts where such instruments are created and used.

...

"We examine the multivalent meanings of algorithmic fairness through a study of OneApp, the unified enrollment system developed more than a decade ago in New Orleans, Louisiana (NOLA).Footnote1 Well-known as a national exemplar of market-based school reform, New Orleans is unique in that all the city’s public-school students now attend charter schools, a radical experiment widely celebrated by the school reform movement that has nevertheless elicited heated debate. Our study shows that a paradigmatic clash has emerged between how fairness in the enrollment process is understood “from above” and “from below.” Fairness tends to be interpreted in narrow, procedural, and ahistorical terms by education experts who design and shepherd UE through implementation, even if many do imbue UE with the normative purpose of limiting the influence of social privilege in access to school choice. By contrast, education activists tend to evaluate fairness with consequentialist reasoning and in terms of broader conceptions of justice rooted in addressing the history of socioeconomic and racial inequality in New Orleans, and the unfulfilled promise of access to quality schools for all. From a top-down perspective, then, UE algorithms are seen as a positive step towards making the school system a more equitable marketplace. In this view, an algorithm-based enrollment system plays a critical role in the democratization of choice. Seen from below by those left out, however, the same algorithms legitimize an inherently unjust market system where chance still determines (unequal) access to educational opportunity. Moreover, the fact that parents need to participate in an algorithmic process instead of directly enrolling their kids in a good-quality neighborhood school signals the absence of real equity.

...

"promoting choice options such as charter schools has yielded benefits to both students who enroll in them and—via competitive effects—those who attend schools nearby (Berends 2015; Jabbar et al. 2022) in some (but not all) cases. On the other hand, researchers have also warned that choice policies can exacerbate existing inequalities, insofar as access to valued information, social networks, and resources are crucial for capitalizing on the new opportunities that become available in a more competitive marketplace

...

“market design” is perhaps the specialization area that most enthusiastically embodies the “performative” aspect of economics practice—the idea that economists not only describe markets but also perform them through sociotechnical devices (Caliskan and Callon 2009; Callon 1998; MacKenzie and Millo 2003).  ... For too long, the design of “fair”, “efficient”, and “transparent” UE algorithms has remained a technical matter in the hands of experts, not an object of study worth analyzing from sociological, political, or even philosophical standpoints.

...

"Interviews consisted of a semi-structured component following an interview guide and a component relying on vignettes designed to compare how our interviewees conceptualize fairness across the same four scenarios. After the first part of the interview, we typically took turns reading vignettes aloud and asking the same set of follow-up questions to our respondents. For example, the first scenario describes Malcolm, a hypothetical student whose family uses OneApp to apply to elementary school and he gets his fifth-choice school, which is rated a C. We then ask respondents to evaluate whether Malcolm has been treated fairly, gradually adding new information about his socioeconomic status, racial background, and disability status.

...

"In this study, we do not rely on statistical sampling logic and do not seek to make generalizable claims about perceptions of fairness regarding OneApp among all administrators or all NOLA families using this UE system. Instead, we aim to show how studying an algorithmic tool reveals how experts and community leaders embedded in the same education policy field have different ways of conceptualizing and talking about fairness. 

...

"For instance, when we described the experience of a hypothetical student, Malcolm, whose parents used OneApp to apply to elementary school last year, many respondents rejected the notion of procedural fairness outright. In the scenario, Malcolm and his family had secured a spot in a school with the letter grade C that was their fifth preference. When we asked our respondents whether Malcolm had been treated fairly, one respondent from an education justice organization replied, “No, I don’t think it’s fair and it makes me wonder what is a better way because [the explanation we hear is], ‘We need more quality seats.’ I’m like, ‘Oh really? How are we going to get there?’ Because we want more quality seats” 

#########

The article goes on to point out that the school district hasn't published the algorithm code or flow charts, which adds to suspicions of unfairness.  My inclination is that such things should be in the public domain, which might help the discussion focus on the very different issues of how schools are assigned, and why not all schools are first rate.

Market Design in El Mercurio--Chile's oldest newspaper

Last Tuesday, in Chile I was interviewed by Eduardo Olivares, the editor for Economics and Business of El Mercurio,  which published the interview yesterday. We talked for an hour about market design generally, about how markets work when they're working well or working badly, and we spoke about school choice (where Chile is a leader) and transplantation (where it is not). The interview is behind a paywall, but below are some extracts (retranslated back into English via Google Translate).

On markets generally:

—Many people ask that “markets be free,” as has recently happened in Argentina. Should they be free?

“That's a complicated question. Markets should be free to function well, but they need conditions that allow them to function well. Having a free market does not necessarily mean a market without rules. A wheel can spin freely because it has a well-greased axle and bearings. A wheel by itself cannot turn very well, and the same goes for the market.”

—Who puts the oil in the wheel gears?

“That's the job of market design. Part of what makes markets work well are good market rules. The government has a role in regulating markets, concerning property rights and things like that. But on another level, entrepreneurs do things. Here in Santiago I [can]... call an Uber using the same app and rules I use in California. Uber is a marketplace for passengers and drivers. The rules can be made by both private organizations and the government.”

On prices:

—Do prices matter?

"A lot. “Prices are important to help allocate scarce resources, but also to make them less scarce.”

...

—When do they not matter?

“Let me start with when they matter a lot: in commodity markets. If you want to buy commodities, price is really the only thing that's happening. But when 'El Mercurio' wants to hire journalists, it doesn't limit itself to offering a salary: it wants it to be a good job, with special reporters. Price is important, but in other markets other things are also important. When you get a new job, the first question your friends ask you is not what the salary is, but who you work for.”

On school choice:

“Most markets are not commodity markets... In some markets we don't like prices to work at all. One of the places where Chile is a leader in market design is school choice: how people are assigned to schools and Chile has done a lot of work on this, although mainly for public schools.”

—What do you know about this system in Chile?

“Not long ago, before there was centralized and widespread school choice in Chile, there were the usual problems with decentralized school choice; That is, parents had to get up early to get in line, and they had a difficult process to register their children.”

—The new system has been criticized. Some claim it caused more people to choose the private system over the public school system. Isn't it similar to what is happening in New York, for example?

“There is something to that. In New York and Boston we also have a system that we call charter schools: free access schools, but organized by private entities, even if they are municipal schools. And they also have different standards. School choice is important, but it does not solve the problems of poverty or income inequality. Now, one of the reasons we have school choice in the United States and perhaps also in Chile is because we think that, otherwise, there is a danger that the poor will be condemned to send their children to poor schools. .

—Has there been any successful case in which parents can honestly rank the order of preference for the school they want their children to go to?

“In Chile, procedures are used that [make it] what game  theorists call a dominant strategy to express true preferences. The [remaining] problem is not in creating systems that make it safe to express preferences, but in distributing the information so that people can form preferences sensibly. In the United States, the hardest families to reach are those who don't speak English at home, so it's sometimes difficult to communicate with them. And different families have different feelings about what kind of schools their children should attend.”

“The benefits of school choice come from the fact that some schools may be high quality for some children but not for others, so we would like children to attend the schools that are best quality for them.”

On kidneys:

—You are famous for the proposal that allowed the “kidney exchange.” Years after the first experience, what do you see now in this type of market?

“Kidney exchange is working quite well in the US, but it works especially well for patients who are not too difficult to match. Even in the US, a fairly large country, we have patients who are so difficult to match that we have trouble finding a kidney for them.”

—And in other countries?

“Smaller countries, with 20 million inhabitants, like Chile, would benefit if we could make national borders not so important. When we look at transplants per million inhabitants, Chile is in the middle of the world. But since it is a small country, when the total number of transplants performed is analyzed, Chile has very few. Kidneys are obtained from both deceased and living donors. In Chile, as in much of the world, the majority of transplants come from deceased donors. Kidney exchange would allow more transplants to come from living donors ... “Twenty million is not enough, so it would be very good to see in South America an exchange of kidneys that can cross between countries, which is not so easy to do.”

Equality of exchange and the role of perceptions

“One of the things that worries people when talking about transplants is that [they think it might be] a medical process that exploits the poor. Of course, the thing about kidney exchange is that each pair of people gives one kidney and receives one kidney. It is very egalitarian. I think kidney exchange is a good place to combat this notion that transplantation is like trafficking,” he notes.

—Notions, perceptions are very important. Many people think of “exchange” as the exchange of securities in the stock market.

“That's right, but not every exchange involves money. One of the discussions about money in the world that is taking place in the European Union at the moment is about payment to blood plasma donors. In the EU, only Germany, Austria, the Czech Republic and Hungary pay blood plasma donors. And those are the only EU countries that have as much blood plasma as they need. The others have to import everything, and they do it from the United States. The United States is the Saudi Arabia of blood plasma (…) The World Health Organization says that plasma must be obtained in each country, and from unpaid donors. You have to be self-sufficient... an economist finds that a little funny. Blood is a matter of life and death. “When there is a pandemic, we do not tell countries that they must be self-sufficient [in vaccines].”

—When we talk about these exchanges of blood plasma and kidneys, school choice systems, we are talking about the same idea: coincident or paired markets. But the concept of the market has been so questioned, especially by some political groups, for so long...

"It's true. Now,  kidney exchange is special because money doesn't change hands. Money changes hands to get medical care, you have to pay doctors, nurses and hospitals. But we are not talking about buying kidneys from donors, but rather that, at the patient level, each pair receives a kidney and donates a kidney. It is radically egalitarian. Many people who think about markets may not think of it as a market, but I think that's a mistake. Many markets are not just about money… we would worry much less about markets if income and wealth inequality did not exist. “What worries us about markets is that some people are poor and some people are rich, and markets seem like a way to give the rich an advantage.”

“There is no doubt that being rich is better than being poor. The real question is what do we do to alleviate poverty. Making it invisible is not the same as alleviating it. One of the reasons I think many countries don't allow blood and plasma donors to be paid is because they don't like the way that looks. It reminds them that some people would like to get some money and would donate blood for it.”

Apparently, according to the caption, I'm "affable and smiling" (although not in this picture:)

I was in Chile to participate in what turned out to be a wonderful workshop on market design at the University of Chile, organized by Itai Ashlagi, José Correa, and Juan Escobar.

Some related recent posts:

Saturday, December 23, 2023

Market design: some press accounts in Chile

Wednesday, December 20, 2023

Public lecture today at the Casa Central de la Universidad de Chile:“Quién obtiene qué y por qué: La nueva economía del diseño de mercados”

Sunday, December 17, 2023

Market Design Workshop 18 - 20 December 2023 Santiago, Chile

Saturday, November 4, 2023

The EU proposes strengthening bans on compensating donors of Substances of Human Origin (SoHOs)--op-ed in VoxEU by Ockenfels and Roth

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Update (Dec. 27): Here's an account of my closing public talk from the U. Chile's Center for Mathematical Modeling, one of the hosts of the market design workshop.

Alvin Roth: “Markets are human artifacts, they are tools that we build ourselves to help us”.

And here's a picture at the close, including some of those mentioned above: At my far left in the picture is José Correa,  who in addition to his other roles is Vice Rector for Information Technologies. Next to him is Alejandra Mizala, prorrector (provost) of the university.  Next to her (immediately to my left) is Rector of the University of Chile, Rosa Devés, and immediately to my right is market designer and director of the MIPP Millennium Institute, Juan Escobar. Next to him is Héctor Ramírez, director of the Center for Mathematical Modeling. And next to him (at my far right) is professor Rafael Epstein who (along with Correa, Escobar, and his daughter Natalie Epstein) has been involved with school choice in Chile, among other things.

Navigating NYC school choice: advice for families

 Each year a new cohort of families has to navigate school choice in New York City.  The city offers lots of resources for gathering information.  One advantage of employing methods that make it safe to reveal true preference orders is that at least one aspect of the process is straightforward. (Of course, constructing a list of 12 schools out of the many available isn't easy.)

The NY Times offers a guide, which is full of information on how to go about gathering information with which to form preferences over schools:

Applying to N.Y.C. Public Schools Can Feel Daunting. Here’s What to Know. What matters when choosing a school? How should you compare options? And what’s the best strategy for getting your first choice?  By Troy Closson, Sept. 5, 2023,

"What’s the best strategy when applying?

"You should rank schools and programs in order of your true preference. There is no better approach. Students are considered for a lower choice only if a higher ranked school does not have space.

"Admissions experts suggest creating a complete list of 12 schools with a balance of programs, priorities and demand per seat, which you can find on MySchools. Apply by the deadline; there is also no benefit to applying earlier"

HT: Parag Pathak

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Another resource:

Abdulkadiroglu, Atila , Parag A. Pathak, and Alvin E. Roth, "Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match,'' American Economic Review, 99, 5, Dec. 2009, pp1954-1978. 

Affirmative action in Brazilian universities: guest post by Inácio Bó

 Recent legislation in Brazil addresses university admissions with affirmative action that targets multiple characteristics that individuals may have (in different combinations), namely income, ethnicity, and the type of institution at which they studied. Early attempts to implement such a system produced undesirable outcomes, but recent legislation, informed by market design, is on the path to correcting this. Below, Inácio Bó brings us up to date:

Guest blog post by Inácio Bó

For many decades, Brazilian’s federal universities were—and still are— the top higher education institutions in the country. They had, however, a contradictory combination of circumstances: all of them were public-funded and tuition-free, but their students were overwhelmingly from a minority white higher socio-economic class. In response to that, in 2012 congress passed legislation mandating affirmative action in the access of all such institutions.

Orhan Aygün and I were at that time classmates pursuing our PhD in economics at Boston College. We spent days and weeks looking at the details of the structure of the rules for implementing the law, trying to better understand it. While working on some examples, we noticed that there could in principle be situations that were at odds with the intended objective of the law. Under some circumstances, black and low-income candidates would be rejected from positions where white and high-income candidates would be accepted, despite the former having higher entry-level exam grades than the latter. This  would be an outcome that goes in the opposite direction from the intended objective of helping black and low-income students attend these institutions.

The reason for this problem lies on the method used for implement the affirmative action law in the universities. Seats in each program in each university were split into groups of seats, including “open seats”, “black candidates”, “low-income candidates”, and “black and low-income candidates”. When applying for a program, a candidate would choose one of the alternatives for which she is eligible. The top candidates among those applying for each set of seats, ranked by their grade in a national exam, would be accepted. This method might, however, result in different levels of competition for different seats in the same program, resulting for example in tougher requirements for acceptance for “black and low-income” candidates than for “black” candidates, even if on average low-income candidates have lower grades overall.

In a paper published in the AEJ:Micro in 2021 (Aygün, Orhan, and Inácio Bó. 2021. "College Admission with Multidimensional Privileges: The Brazilian Affirmative Action Case." American Economic Journal: Microeconomics, 13 (3): 1-28.), we showed how this problem can be solved while still satisfying the text and spirit of the affirmative action law in Brazil with small changes in the way by which candidates are selected. (The idea is to order slot-specific priorities so that candidates with protected characteristics can compete for all of those slots for which their characteristics qualify them.) The paper also shows “smoking gun” evidence that these “unfair rejections” were taking place, showing that programs where the cutoff grades for acceptance for each subset of seats were compatible with these rejections constituted almost half of the programs offered across the nation.

While the article gained praise in the academic economic community, our hopes that it would reach the policymakers in Brazil were initially dashed. Despite having the chance of personally visiting the Ministry of Education in 2015 for two weeks, my attempts to talk with those in power were unsuccessful, and people to whom I explained some of our findings deemed its contents “critical of the government”.

 Especially in light of the political developments that took place in Brazil in the years that followed, I had mostly moved on from my hopes of seeing the changes we proposed being implemented.

Things started to change, however, around May of 2022. The staff from the office of representative Tábata Amaral, who is a prominent young politician with a focus on education, were having talks with Ursula Mello, now a professor at the Department of Economics at PUC-Rio in Rio de Janeiro, about some aspects of the affirmative action law related to her work. Given her knowledge about the AEJ:Micro paper, Ursula suggested that I join the discussions. A meeting where this happened even ended up in the press (https://www1.folha.uol.com.br/educacao/2022/05/pesquisadores-defendem-novo-algoritmo-no-sisu-para-nao-prejudicar-cotistas.shtml).

Adriano Senkevics, her co-author in related papers who works at the INEP—an agency connected to the Brazilian Ministry of Education in charge of evaluating educational systems—also joined.

In these discussions, it became clear that if we wanted our ideas to have any chance of gaining traction, we needed to write a policy-oriented paper, focused on the current Brazilian specifics, in Portuguese, and with policy-makers as the audience—not academics.

Adriano and I worked together in that project, now with a much more detailed dataset. We tailored the proposal to the updated law, which also included reservations for candidates with disabilities, and were finally able to quantify the negative impact of the failures we identified. Our estimates indicate that, in the selection process of 2019, at least ten thousand students were “unfairly rejected” from their applications, with more than 8 thousand being left unmatched to any university despite having an exam grade high enough to be accepted for less restrictive reserved seats. These numbers greatly exceeded our expectations, and made a clear political case for a change. The working paper went out in January of 2023 (“Proposal to change the rules for the occupation of quotas in the student entrance to federal institutions of higher education,” by Inácio Bó and Adriano Souza Senkevics).

While the theoretical arguments were already in the AEJ:Micro paper, the proposal had a greater and faster impact in the corridors of the Brazilian capital. Articles in the main newspapers in the country reported on the findings and the proposal (https://oglobo.globo.com/brasil/educacao/enem-e-vestibular/noticia/2023/03/quase-650-candidatos-para-uma-vaga-maiores-concorrencia-do-sisu-estao-entre-os-alunos-cotistas.ghtml

, https://oglobo.globo.com/brasil/antonio-gois/coluna/2023/02/reformar-o-sisu.ghtml

, https://www1.folha.uol.com.br/colunas/rodrigo-zeidan/2023/04/desenhando-mercados.shtml )

People were openly sharing the article on twitter with members of the ministry of education

(https://twitter.com/thiamparo/status/1621189953785839617?s=20 ,

https://twitter.com/mgaldino/status/1621008428763332612?s=20 ). We could feel the momentum.

In the months that followed, I started having regular interactions with members of the Ministry of Education. The text and zoom discussions involved technical and political aspects of changes in the law, which extended beyond the specific changes we suggested.

Different variations of the changes and some alternative proposals were considered. I had to run simulations while flying to deliver them before a meeting that the secretary had with the minister. I also had the incredible experience of joining a meeting at the “Casa Civil”—a department somewhat comparable to the prime minister in a parliamentary system—with the presence of secretaries from multiple ministries , where I presented our proposal and discussed some details and scenarios. Around that time, and without our knowledge, a senator presented a bill explicitly based on our proposal (https://www25.senado.leg.br/web/atividade/materias/-/materia/156995 ).

By the end of June, our belief that the changes would be implemented became stronger. Since our proposal was (by design) already compatible with the quotas law, its implementation could be done even in the absence of new legislation, and there was clear interest on the part of those in charge for making it happen.

A momentous event in this journey, however, took place on August 9th.

Because of a series of political circumstances, an urge to pass a renewed law for the affirmative action led to a bill proposed by Representative Dandara—the first member of congress who herself benefitted from the quotas law—to be brought to the floor for a vote.

Among other changes, it made the affirmative action policy permanent, changed the order in which seats are filled, and included text that should, in the following secondary legislation, include text that describes our proposal. As if emotions were not high enough, we had urgent calls to send the text of our proposal to members in the floor of congress minutes before the vote took place. And this resulted in the photo below, showing Dandara giving a speech before the vote, with a page from our paper in her hand.

The journey is not yet over. The bill must still pass the senate, and the legislation with the implementation details will follow. But I learned that these changes are made of so many steps that one has to choose one as the turning point. We believe that this is a good one.

The INEP (National Institute of Educational Studies and Research) thinks so too: (https://www.gov.br/inep/pt-br/assuntos/noticias/linha-editorial/inep-contribui-com-atualizacao-da-lei-de-cotas)

Incentives in matching markets: Counting and comparing manipulating agents by Bonkoungou and Nesterov

 Here's a paper that caught my eye in the current issue of Theoretical Economics, Volume 18, Issue 3 (July 2023)

Incentives in matching markets: Counting and comparing manipulating agents by Somouaoga Bonkoungou and Alexander Nesterov

Abstract: Manipulability is a threat to the successful design of centralized matching markets. However, in many applications some manipulation is inevitable and the designer wants to compare manipulable mechanisms to select the best among them.  We count the number of agents with an incentive to manipulate and rank mechanisms by their level of manipulability. This ranking sheds a new light on practical design decisions such as the design of the entry-level medical labor market in the United States, and school admissions systems in New York, Chicago, Denver, and many cities in Ghana and the United Kingdom.

"First, we consider the college admissions problem where both students and schools are strategic agents (Gale and Shapley (1962)) and schools can misreport their preferences as well as their capacities. We show that when all manipulations (by students as well as by schools) are considered, the student-proposing Gale–Shapley (GS) mechanism has the smallest number of manipulating agents among all stable matching mechanisms (Theorem 1). Dubins and Freedman (1981) and Roth (1982) show that this mechanism is not manipulable by students. This result was one of the main arguments in favor of its choice for the NRMP. However, it also has the largest number of manipulating schools among all stable mechanisms (Pathak and Sönmez (2013)). Our result still supports its choice when all strategic agents are considered. What is more, it is still the best choice even when schools can only misreport their capacities, but not their preferences. All these conclusions carry over to the general model where, in addition, students face ranking constraints: although the student-proposing GS mechanism is now manipulable by students, it is still the least manipulable mechanism.

"Second, we consider the school choice problem (Abdulkadiroglu and Sönmez ˘ (2003)) where students are the only strategic agents and also face ranking constraints. Historically, many school choice systems have used the constrained immediate acceptance (Boston) mechanism, but over time shifted toward the constrained student proposing GS mechanisms and relaxing the constraint. We demonstrate that the number of manipulating students (Theorem 2) weakly decreased as a result of these changes."

Affirmative action in India

 Here's an interesting paper by Orhan Aygün and Bertan Turhan. It comes with something of a backstory, which accounts for its quite delayed publication (delays both in initial acceptance and then in publication after acceptance*). I gather it will appear in the next issue of Management Science.

How to De-Reserve Reserves: Admissions to Technical Colleges in India by Orhan Aygün and Bertan Turhan, Management Science (forthcoming),  Published Online:11 Nov 2022 https://doi.org/10.1287/mnsc.2022.4566

Abstract: "We study the joint implementation of reservation and de-reservation policies in India that has been enforcing comprehensive affirmative action since 1950. The landmark judgment of the Supreme Court of India in 2008 mandated that whenever the OBC category (with 27% reservation) has unfilled positions, they must be reverted to general category applicants in admissions to public schools without specifying how to implement it. We disclose the drawbacks of the recently reformed allocation procedure in admissions to technical colleges and offer a solution through “de-reservation via choice rules.” We propose a novel priority design—Backward Transfers (BT) choice rule—for institutions and the deferred acceptance mechanism under these choice rules (DA-BT) for centralized clearinghouses. We show that DA-BT corrects the shortcomings of existing mechanisms. By formulating India’s legal requirements and policy goals as formal axioms, we show that the DA-BT mechanism is unique for the concurrent implementation of reservation and de-reservation policies."

*This paper spent a long time waiting to be published, because of what seems to have been a priority dispute that, after the paper was accepted for publication,  was pursued through  allegations of research misconduct. The editorial office of Management Science conducted an investigation that determined that there was no reason not to proceed with publication.

#######

Update: here's the citation to the published version

Orhan Aygün, Bertan Turhan (2022) How to De-Reserve Reserves: Admissions to Technical Colleges in India. Management Science 69(10):6147-6164.

https://doi.org/10.1287/mnsc.2022.4566

School choice and related matching algorithms in France, by Vincent Iehlé and Julien Jacqmin

Here's a recent paper that looks at the assignment of students to some of France's Grandes Ecoles, and draws some conclusions about the preferences for those schools.

SIGEM : analyse de la procédure d’affectation dans les grandes écoles de management,, Vincent Iehlé, Julien Jacqmin, Dans Revue économique 2023/2 (Vol. 74), pages 139 à 168 (SIGEM: analysis of the assignment procedure in major management schools)

"First, we list the expected properties of the assignments produced by the SIGEM. To do this we identify the SIGEM algorithm. It is quite standard in this type of environment since it is the “schools” version of the algorithm of Gale and Shapley [1962]. Based on this information, we show that assignments satisfy a stability property that is crucial in educational systems since it guarantees fair treatment of declared wishes and rankings. On the other hand, the use of this version of the algorithm of Gale and Shapley [1962], in opposition to the "candidate" version, raises two reservations concerning, on the one hand, the sub-optimality of the assignments from the point of view candidates and, on the other, the theoretical absence of simple strategies for candidates to play when submitting their wishes. This theoretical analysis of the algorithm is completed by a discussion on the specificities of the SIGEM procedure which can explain the formation of strategic behaviors. The second contribution concerns the use made of the results of this procedure in the case of SIGEM. We show how post-assignment data is used to determine the influential ranking of SIGEM from the so-called cross-dismissal matrix, itself based on the candidates' revealed preferences and their final assignments. The last contribution concerns the exploitation of a stylized fact which justifies the joint analysis of the algorithm and the SIGEM classification. The post-assignment data indeed reveal the existence of a hierarchy of schools that is very rigid and that achieves a consensus among students. This point is particularly interesting because it finally allows to have a finer look at the theoretical properties of the algorithm, the alignment of the preferences of the candidates tending to limit the impact of the negative effects associated with the use of the version "schools" of the algorithm of Gale and Shapley [1962]."

...

"Figure 2 presents for each school the number of ranked candidates and the number of wishes expressed for the school among these ranked. It seems to confirm the existence of these voluntary self-censorship strategies. In particular, we observe a significant loss for schools of average attractiveness (for example, AUDENCIA, NEOMA, SKEMA) which are more likely to be subject to both downward and upward truncation on the part of candidates ."

********

Recall also, 

Strategic Issues in the French Academic Job Market, by Guillaume Haeringer, Vincent Iehlé In Revue économique Volume 61, Issue 4, 2010, pages 697 to 721

The Robert Rosenthal Memorial Lecture for 2023 at BU, by Parag Pathak

 Parag Pathak gave this year's Robert Rosenthal Memorial Lecture at Boston University. The title of his talk is “Still Worth the Trip? The Evolution of School Busing in Boston” 

(The video below may undergo some further editing, but right now it starts with introductions at minute 3.) 

You can also find the Rosenthal lectures from previous years at the link.

(I had the honor of giving the 2007 lecture... Bob Rosenthal and I are academic siblings, we were both advised by Bob Wilson.)

School choice, by Atila Abdulkadiroğlu and Tommy Andersson

 Here's what looks to be a magisterial survey of school choice by two pioneers of the theory and practice of market design.

School choice by Atila Abdulkadiroğlu and Tommy Andersson, Handbook of the Economics of Education, Available online 3 January 2023, https://doi.org/10.1016/bs.hesedu.2022.11.001 

Abstract: School districts in the United States and around the world are increasingly moving away from traditional neighborhood school assignment, in which pupils attend closest schools to their homes. Instead, they allow families to choose from schools within district boundaries. This creates a market with parental demand over publicly-supplied school seats. More frequently than ever, this market for school seats is cleared via market design solutions grounded in recent advances in matching and mechanism design theory. The literature on school choice is reviewed with emphasis placed on the trade-offs among policy objectives and best practices in the design of admissions processes. It is concluded with a brief discussion about how data generated by assignment algorithms can be used to answer contemporary empirical questions about school effectiveness and policy interventions.

Managing inter-district school choice, by Yuchiro Kamada and Fuhito Kojima

 Here's a paper that considers inter-district school choice, motivated by Tokyo day care centers.  I think  a similar problem arises in the EU in allocating foreign study opportunities for college students.

 Ekkyo Matching: How To Connect Separate Matching Markets For Welfare Improvement  By Yuichiro Kamada And Fuhito Kojima

Abstract. "We consider a school-choice matching model that allows for inter-district transfer of students, with the “balancedness” constraint: each student and school belongs to a region, and a matching is said to be balanced if, for each region, the outflow of students from that region to other regions is equal to the inflow of students from the latter to the former. Using a directed bipartite graph defined on students and schools, we characterize the set of Pareto efficient matchings among those that are individually rational, balanced and fair. We also provide a polynomial-time algorithm to compute such matchings. The outcome of this algorithm weakly improves student welfare upon the one induced when each region independently organizes a standard matching mechanism"

" In Japan ... allocation of slots at accredited daycares are conducted by individual municipal governments and, with few exceptions, a child can only attend a daycare in the municipality of their residence. The City of Tokyo, for example, is divided into 23 small municipalities ... and each conducts a matching independently. Due to the small sizes of the regions, many families would find inter-district admissions—which is called the ekkyo admission ... to be a viable option. Moreover, as a large metropolitan area, many people cross a city boundary to commute, making it potentially more convenient to put their children to a daycare center close to their workplace"

School choice consulting in New York City

 It is a truth universally acknowledged that any stressful process in which affluent people participate must be in need of a consulting industry.

New York City's school choice processes are no exception:

The School-Admissions Whisperer Joyce Szuflita can assuage Brooklyn’s most anxious parents.  By Caitlin Moscatello

"For the better part of two decades, Szuflita has demystified the process of public-school admissions for some of Brooklyn’s most overwhelmed, optimization-prone parents. ... Prekindergarten and elementary admission are largely based on where you live. But the game gets significantly more byzantine come middle school and more complex yet for high school, with its tier of “screened” institutions that have traditionally required students to test in, audition, or undergo other high-stress assessments. The process of getting into certain schools — and don’t kid yourself, everybody wants in — has long been a brutal one. Until it got slightly easier. And then brutal again. Or maybe some middle level of brutal? This is why parents need Szuflita.

...

"On September 29, schools chancellor David C. Banks abruptly announced that some of the city’s most prestigious middle and high schools would move away from an open lottery system and increase their use of merit-based admissions. The approach prioritizes students with an A average — children Banks calls “hardworking,” a loaded description in a city with one of the greatest wealth disparities in the country — and reverses the previous mayor’s strategy, which aimed to usher more lower-income students into New York’s top schools.

...

“The pendulum is swinging back a little bit,” Szuflita says of the Banks announcement, insisting that the changes are not as sweeping as they might seem. “The algorithm is still exactly the same.” Contrary to how some have read the news, the old lottery is still partially in use. The random number (a hexadecimal, actually) that each student is assigned works as a tiebreaker to get into screened high schools and can sometimes be a major factor when families submit their ranked choices of preferred schools.

"Clients often panic about their lottery numbers and want to change the ranking of their list, which Szuflita doesn’t recommend for anyone except those with exceptionally high or low numbers. Trying to outsmart the process, she says, is pure “magical thinking.” She’s constantly telling parents to trust the fairness of the city’s sorting algorithm, whose authors literally won the Nobel Prize, and rank in true preference order. (Or, as she tends to put it in emails: “RANK IN TRUE PREFERENCE ORDER!!!!!!!”) Despite this, clients sometimes persist, asking, How do we work the algorithm to our advantage? How do we strategize ranking our list? “That’s when I yell at people in the nicest way,” she says, because they don’t know what they’re talking about and they’re cutting into her time. “Like, ‘No, shut up. Shut up and listen to me. You’re not going to get everything you need to know.’” But most of her consults take two hours, she says, and don’t involve a lot of back-and-forth. “They tell me about their children and then what follows is usually a rapid-fire, two-hour information dump from me. There is not a lot of airing of concerns, because I already anticipate their concerns.” The download is intensely specific, tailored to each family and covering individual schools, principals, teachers, and facility upgrades few people are aware of. She verifies rumors (or sets the record straight) and knows things you can’t find on the internet."

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Related recent post:

Sunday, October 2, 2022

Return to previous school assignment policies (in some respects) under New York City's new mayor