Blog on school choice by Atila Abdulkadiroglu

Atila Abdulkadiroglu at Duke has a new blog called
School Choice: News and developments from schools and economics that matter to parents and districts.

His first two posts have been on the debate about choice in Wake County.

Harvard's mysterious Z-list

One of the more unusual routes to admission at Harvard is the Z-list, which the Crimson writes about this week. Z-Listed Students Experience Year Off: Undergrads take mandatory gap year before coming to Harvard

Last year I wrote about it here: Harvard's "Z-list," waitlist admission with a difference .

It's that mandatory year off that makes the Z-list unusual (students who enter from the Z-list must delay a year and can't attend another school while they wait).

The mystery is to whom this admissions option is offered, and who chooses to accept. There's some signaling going on here, and some sorting.

Kidney exchange at NEPKE

The Sunday Globe has a good story about a recent three way kidney exchange at the New England Program for Kidney Exchange. One of the donors was a prominent local nephrologist.
Harvesting hope from a giving tree: The story of three couples, three kidneys and one goal: life.

It's a well written article that illustrates both some of the logistical complexities of a three way exchange, and some of the personal details of the six participants.

I'm always glad to see three way exchanges, in part because for a while it seemed like the logistical difficulties would preclude them.

Here are the papers which helped us make the case in New England:

Saidman, Susan L., Alvin E. Roth, Tayfun Sönmez, M. Utku Ünver, and Francis L. Delmonico, " Increasing the Opportunity of Live Kidney Donation By Matching for Two and Three Way Exchanges," Transplantation, ,81, 5, March 15, 2006, 773-782.

Roth, Alvin E., Tayfun Sonmez , and M. Utku Unver, "Efficient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences," (May, 2005. NBER Paper w11402), American Economic Review, 97, 3, June 2007, 828-851. (And here is the online appendix with some of the proofs.)

One of the curious things about publishing in both economics and medical journals is that the paper which came first was published second...the AER takes a bit longer than Transplantation.

The market for matzot

The Passover holiday is a time to think about matzah, whose plural is matzot. A little market history: Thoroughly Modern Matzah

"In 1888, Behr Manischewitz, an astute and pious immigrant from East Prussia, opened a matzah factory in Cincinnati. Soon facing local competition, he cut costs, improved quality, and burnished his image. His factory introduced the first square matzot, unmistakable products of industrial automation. Advertising his technology to English readers, he simultaneously won rabbinic endorsements in Yiddish and Hebrew periodicals.
Over time, Manischewitz and his competitors—Streit, Horowitz-Margareten, Goodman—created a distinctively American matzah for a a distinctively American Passover: a holiday coming to be seen less as the birth of a particular nation than as a celebration of freedom in general."

Some further background here: Those Magnificent Men and Their Matzah Machines*

Chag Pesach sameach, y'all. Let's all try to excel at being free.

School choice in North Carolina

"A bitter fight over school choice in North Carolina grabbed national headlines in recent months," says a news release from Duke University, which notes that Duke is fortunate in having a local expert on school choice, in Atila Abdulkadiroglu.

News Tip: Economic Model Can Help Diversify U.S. Schools While Maintaining Community School Preferences, Expert Says
"The use of economic models to design flexible assignment policies can help school systems achieve racial and socioeconomic diversity while also keeping parents who prefer neighborhood schools happy, says a Duke University professor who researches the economics of education.
A key component is to incorporate parental preferences in school assignments “to the maximum extent possible,” says Atila Abdulkadiroglu, a professor in Duke’s Department of Economics."

Here's the background story: Duke Professor Says Diversity, Parental Choice Can Work Together.
"Earlier this week, the Wake County School Board voted 5-4 to end the district's diversity policy by stopping the practice of busing students to achieve socio-economic balance, and instead switch to neighborhood-based assignments."

Usury and anti-semitism

From Ira Stoll's review of Capitalism and the Jews, by Jerry Z. Muller, Princeton University Press:

"The book by Mr. Muller, a professor of history at Catholic University, consists of a short introduction and four chapters. It's the first chapter, "The Long Shadow of Usury," that's the most enlightening.
"Usury was an important concept with a long shadow. It was significant because the condemnation of lending money at interest was based on the presumptive illegitimacy of all economic gain not derived from physical labor. That way of conceiving of economic activity led to a failure to recognize the role of knowledge and the evaluation of risk in economic life," he writes. "So closely was the reviled practice of usury identified with the Jews that St. Bernard of Clairvaux, the leader of the Cistercian Order, in the middle of the twelfth century referred to the taking of usury as 'Jewing'" says Mr. Muller."

China's theme park of dwarves

A Miniature World Magnifies Dwarf Life

Quotes reflecting opposing views of repugnance:

“I think it is horrible,” said Gary Arnold, the spokesman for Little People of America Inc., a dwarfism support group based in California. “What is the difference between it and a zoo?” Even the term “dwarf” is offensive to some; his organization prefers “person of short stature.”

"But there is another view, and Mr. Chen and some of his short-statured workers present it forcefully. One hundred permanently employed dwarfs, they contend, is better than 100 dwarfs scrounging for odd jobs. They insist that the audiences who see the dwarfs sing, dance and perform comic routines leave impressed by their skills and courage."

HT: Zhenyu Lai and Aytek Erdil

School choice is serious business: litigation and politics in NYC and Chicago

In NYC, high school admissions have been delayed by a lawsuit motivated by the city's effort to close some schools: High school letters delayed.

"March 24 Update — Chancellor Joel Klein released a statement on the delay of high school letters today. “I understand you are anxious to receive this information, and rest assured, the Department of Education is doing everything possible to make the matches available soon,” it reads.
The statement acknowledges that the delay is being caused by the NAACP/teachers union lawsuit, but does not comment on the lawsuit or provide an estimated date for the letters’ release. It does state that the DOE will issue another update when it “knows more.”
March 23 — Eighth-graders anxiously awaiting receipt of high school acceptances letters tomorrow will have to be patient a while longer. How much longer is not clear. The letters, due to be distributed to students on March 24, are still being held up by court order because of a lawsuit filed against the Department of Education by the NAACP and the teachers union. The lawsuit charges that the DOE acted illegally in moving to close 19 schools."

Update: March 26, Judge Blocks Closing of 19 New York City Schools. The city will appeal. In the meantime, "The lawsuit had held up some 85,000 high school acceptance letters that were due out on Wednesday. The city’s interpretation of the ruling is that it clears the way for all those letters to go out next week, although the plaintiffs disagree.
Students were required to state their high school preferences in early December, around the time the department began to reveal which schools it wanted to close. About 8,500 applied to the schools proposed for closing and were notified later that they could not attend them. Those students will receive acceptance letters from other schools next week, along with a note saying that they could revert to their original choice if the school remains open. "


In Chicago, school assignments involved some high powered political wheeling and dealing: In Chicago, Obama Aide Had V.I.P. List for Schools.

HT: Parag Pathak

Time to scramble, if still on the economics job market

If you are still on the market for new economics Ph.D.s, now is the time to register for the 2010 Job Market Scramble

Registration is open now, and remains open only until March 30, this coming Tuesday. Don't wait until the last day to do it; not only does that make it more likely that you will forget, but I'm not sure when on Tuesday the signup might go away. If you aren't currently holding an offer you might accept this weekend, or expecting one imminently, and if you are still looking for a job this year, I would recommend signing up now.

The scramble site will be open for viewing (candidates can view jobs, and employers can view candidates) from April 1-12.

The Scramble is discussed on pages 13-15 of our recently revised paper
Peter Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth, and John J. Siegfried , " The Job Market for New Economists: A Market Design Perspective," revised March 19, 2010, forthcoming in Journal of Economic Perspectives, Summer 2010.
The current version of that paper can be found here (and I'll update this link when the final version becomes available, which should have some ex-post description of this year's scramble numbers).

Random matchings

Random matchings are the subject of two new papers.

The first (not in chronological order:) IMPLEMENTING RANDOM ASSIGNMENTS: A GENERALIZATION OF THE BIRKHOFF-VON NEUMANN THEOREM by ERIC BUDISH, YEON-KOO CHE, FUHITO KOJIMA, AND PAUL MILGROM

Abstract. "The literature on random mechanisms often describes outcomes incompletely as "random assignments" expressing the expected number of objects of each type assigned to different agents and a set of feasibility constraints that a pure assignment must satisfy. We provide a necessary and sufficient condition (the "bihierarchy" condition) for the set of constraints to have the property that if the random assignment satisfies them, then it is implementable by a lottery over feasible pure assignments. Our theorem maximally generalizes the celebrated Birkhoff-von Neumann theorem. We also provide an algorithm to implement any such random assignment. Several applications are described, including (i) single-unit random assignment, such as school choice; (ii) multi-unit random assignment, such as course allocation and fair division; and (iii) twosided matching problems, such as the scheduling of inter-league sports matchups. The same method also finds applications outside economics, generalizing previous results on the minimize makespan problem in the computer science literature."

The second (no significance to the ordering aside from when I read them) is "An Equivalence result in School Choice" by Jay Sethuraman
ABSTRACT: "The main result of the paper is a proof of the equivalence of single and multiple lottery mechanisms for the problem of allocating students to schools in which students have strict preferences and the schools are indifferent. This solves a recent open problem proposed by Pathak, who was motivated by the practical problem of assigning students to high schools in New York City. In proving this result, a new approach is introduced, that simplifies and unifies all the known equivalence results in the house allocation literature. Along the way, two new mechanisms—Partitioned Random Priority and Partitioned Random Endowment—are introduced for the house allocation problem. These mechanisms generalize several known and well-studied mechanisms for the house allocation problem and are particularly appropriate for many-to-one versions of the problem, the school choice problem being the most prominent."

(And here's a link to the earlier paper by Parag Pathak: Lotteries in Student Assignment: The Equivalence of Queueing and a Market-Based Approach)

Misc. kidney exchange links

The growth of kidney exchange is reflected in the following miscellany of stories.

Trading for the Perfect Match: MassGeneral Hospital for Children patient receives kidney through a four-way kidney swap arranged by the New England Program for Kidney Exchange.

At the University of Maryland: Paired Kidney Exchange: A Major Breakthrough in Kidney Transplantation

Doctor: ‘Living my dream’ Kidney surgeon Dr. J. Keith Melancon returns to speak at his alma mater, the U. of Louisiana.
"Melancon was in town as the featured speaker of the university’s Black History Month kick-off celebration Monday evening. Before the event, Melancon visited with students at Comeaux High, South Louisiana Community College and ULL.
Melancon now has a role in African American history. He said he recognizes that his story is an “American story.”
“This little black boy from Lafayette, Louisiana, overcoming the obstacle of growing up young and black in America,” he said. “I am proud of my heritage of coming from here.”
Now, at 41, Melancon is director of the kidney and pancreas transplant program at Georgetown University Hospital. He said he made the move from Baltimore to make a difference in metropolitan Washington, D.C., where there’s a large minority population and a high incidence rate of kidney disease.
“If you’re African-American in this country, you’re four times more likely to have kidney disease,” Melancon said."

see here for a chart on the 13-way set of three kidney exchange chains each started by an altruistic donor,

And this comment by Sally Satel and Mark Perry on how many more donors might be available if they could be legally compensated: More kidney donors are needed to meet a rising demand

Kidney exchange in Pittsburgh
"McGowan Institute for Regenerative Medicine faculty member Ron Shapiro, MD, is director of the kidney, pancreas, and islet transplant program at the UPMC Thomas E. Starzl Transplantation Institute and professor of surgery and Robert J. Corry Chair in Transplantation Surgery at the University of Pittsburgh School of Medicine. On December 10, Dr. Shapiro and a team of UPMC doctors participated in UPMC’s first kidney paired donation in collaboration with Temple University Hospital and the Paired Donation Network. The couples, a husband and wife from Pittsburgh and two sisters from Philadelphia, donated kidneys to each others’ loved ones in a two-way surgical swap. Such paired exchanges are still uncommon. All donors and recipients are recovering well.
...This exchange was facilitated by the Center for Organ Recovery and Education (CORE) and the Gift of Life".

and in CA: UC Davis Medical Center completes four kidney transplants in two days using paired exchange
"(SACRAMENTO, Calif.) — Using the revolutionary new approach to kidney transplants known as paired exchange, four patients have received live-donor kidney transplants through the UC Davis Kidney Transplant Program."

and in Philadelphia: Her one kidney changed four lives

meanwhile, mixed news from Europe:
EU want to impose ban on altruistic, pooled and paired kidney donations.
while in Spain things seem to be going the other way:
Donar órganos en vida a desconocidos será legal (ht Flip Klijn)
Here's a summary.

Transplant ethics

Two stories reflect different aspects of current debates about transplantation, and who are appropriate recipients, and donors.

Transplant tourism poses ethical dilemma for US doctors

"In the current case, a 46-year-old Chinese accountant (HQ) was placed on the UNOS transplant registry with a Model for End Stage Liver Disease (MELD) score of 18 that increased to 21 while on the candidate waitlist for over a year (MELD scores range from 6 for those least ill through 40 for those most sick). HQ then traveled to the People's Republic of China (PRC) and was transplanted two weeks after arrival. After transplantation, HQ returned to the Mount Sinai program requesting follow-up care, which was provided. HQ then developed biliary sepsis requiring hospitalization and re-transplantation seemed to be the only viable option.

"While the patient was a medically suitable candidate, team members disagreed if it were indeed, morally right to provide him with a transplant," said Thomas Schiano, M.D., one of the case clinicians and lead author of this study. Ultimately, the transplant team proceeded with a liver transplant for HQ and he is currently doing well. "Our consensus to transplant was based on the relevant principles of medical ethics—non-judgmental regard, beneficence, and fiduciary responsibility," added Dr. Schiano. " (emphasis added)

"The Dilemma and Reality of Transplant Tourism: An Ethical Perspective for Liver Transplant Programs." Thomas D. Schiano, Rosamond Rhodes. Liver Transplantation; Published Online: January 26, 2010 (DOI: 10.1002/lt.21967); Print Issue Date: February 2010.

Project to get transplant organs from ER patients raises ethics questions
"The practice could backfire by making an already skeptical public less likely to designate themselves as organ donors, several experts said. "

Reserve prices in ad auctions: a field experiment by Ostrovsky and Schwarz

Reserve Prices in Internet Advertising Auctions: A Field Experiment by Michael Ostrovsky and Michael Schwarz.

Abstract
"We present the results of a large field experiment on setting reserve prices in auctions for online advertisements, guided by the theory of optimal auction design suitably adapted to the sponsored search setting. Consistent with the theory, following the introduction of new reserve prices revenues in these auctions have increased substantially."


And, from the introduction:
"Reserve prices in the randomly selected "treatment" group were set based on the guidance provided by the theory of optimal auctions, while in the "control" group they were left at the old level of 10 cents per click. The revenues in the treatment group have increased substantially relative to the control group, showing that reserve prices in auctions can in fact play an important role and that theory provides a useful guide for setting them. This increase is especially pronounced for keywords with relatively high search volumes, for keywords in which the theoretically optimal reserve price is relatively high, and for keywords with a relatively small number of bidders."...

"Our paper makes several contributions relative to [earlier] studies. First, it analyzes a much larger and economically important setting, with thousands of keywords and millions (and potentially, given the size of the online advertising industry, billions) of dollars at stake. Consequently, many of the bidders in this setting spend considerable time and resources on optimizing their advertising campaigns. Second, the reserve prices in the experiment are guided by theory, based on the estimated distributions of bidder values. To the best of our knowledge, there are no other papers describing direct practical applications of the seminal results of Myerson (1981) and Riley and Samuelson (1981). Third, unlike the previous studies, the benchmark in our analysis is not a zero reserve price, but the existing reserve price set by the company after a long period of experimentation."


In the conclusion they say that setting optimal reservation prices reduces ads shown by about one per search, but increases search revenue by almost 3%, which is a big deal when multiplied by the enormous numbers of searches.

Congressional briefing, postscript

On March 15, 2010 I gave a 15 minute presentation as part of a Congressional Briefing on the usefulness of Economics (particularly economic research supported by the NSF). Here are my slides: Improved Markets for Doctors, Organ Transplants and School Choice. (My talk focused on how early NSF-supported game theory research had led to recent developments in market design.)

The slides take a little while to load, since they contain a few photos. Speaking of photos, afterwards there were some photo opportunities, and I was happy to be included in the one above with my new Senator from MA, Scott Brown, who I wish the very best of luck in his demanding new job.

Signaling and hiring: one law recruiter's opinion

From the Faculty Lounge: Tim Zinnecker writes

"Speaking solely for myself (and not fellow committee members or my law school institution), I hope we place a greater burden on candidates to prove a genuine interest in relocating, before we start the courtship. It can be frustrating (not only for law schools, but for other candidates who get "bumped") when, after the time and expense of a flyback, a candidate declines, citing "spousal relocation phobia." Some candidates disclose geographic restrictions on the FAR forms. Thank you. Some candidates decline the flyback, citing geographic concerns. Thank you (although why did you accept the screening interview?). But candidates who accept the flyback, receive an offer, and then disclose that the spouse won't relocate? Very frustrating."

Market design posters

I'm giving a public talk on market design in Toronto on March 22, and Martin Osborne writes:

"Hi Al. We're making preparations for your visit. We've created some posters that you may be interested to see http://www.economics.utoronto.ca/osborne/poster1.pdf
http://www.economics.utoronto.ca/osborne/poster2.pdf
http://www.economics.utoronto.ca/osborne/poster3.pdf
http://www.economics.utoronto.ca/osborne/poster4.pdf
http://www.economics.utoronto.ca/osborne/poster5.pdf
(#4 is a much bigger file than the others, because we are going to us it for the hard copies.)"

The pictures are great. To my eye, the market in poster 2 looks like the one in most need of some design...

Match Day!

This year's schedule for announcing the results of the resident match ends today, when most graduating medical students will learn where they have been matched.

Over the last few days, those who were not matched in the main match learned of this, so that they could "scramble" to match by the time that their colleagues would learn of their matches.

Here's this year's schedule:

March 15, 2010--Applicant matched and unmatched information posted to the Web site at 12:00 noon eastern time.
March 16, 2010--Filled and unfilled results for individual programs posted to the Web site at 11:30 a.m. eastern time.
Locations of all unfilled positions are released at 12:00 noon eastern time. Unmatched applicants may begin contacting unfilled programs at 12:00 noon eastern time.
March 18, 2010--Match Day! Match results for applicants are posted to Web site at 1:00 pm eastern time.

Next year this will all play out differently, since the NRMP has decided to organize a "managed scramble":

"The NRMP Board of Directors has voted to proceed with implementation of a "managed" Scramble for the 2012 Main Residency Match. Under the plan, unfilled positions must be offered and accepted through the NRMP R3 System during Match Week. Offers will be made every three hours Wednesday - Friday of Match Week, and applicants will be able to receive multiple simultaneous offers. Match Day will be moved from Thursday to Friday. Questions should be directed to nrmp@aamc.org."

Right now there is pressure on the number of residencies that can be funded, so there may not be as much problem with congestion as would otherwise be a concern. We'll have to wait until next year to find out. (I wasn't involved in this latest design discussion.)

Who would sell kidneys, if kidney sales were legal?

Not just the poor, according to a new (and sure to be controversial) study conducted by interviewing people at regional rail and urban trolley lines near Philadelphia.

The Annals of Internal Medicine has just published an article
Regulated Payments for Living Kidney Donation: An Empirical Assessment of the Ethical Concerns by Scott D. Halpern, Amelie Raz, Rachel Kohn, Michael Rey, David A. Asch, and Peter Reese.

It finds: "...participants' willingness to donate increased significantly as their risk for kidney failure decreased, as the payment offered increased, and when the kidney recipient was a family member rather than a patient on a public waiting list (P [lessthan] 0.001 for each). No statistical interactions were identified ...between payment and income (odds ratio, 1.01 [CI, 0.99 to 1.03]). The proximity of these estimates to 1.0 and narrowness of the CIs suggest that payment is neither an undue nor an unjust inducement, respectively. Alerting participants to the possibility of payment did not alter their willingness to donate for altruistic reasons (P = 0.40). "

The lead author, Scott Halpern, is at Penn, affiliated with the Center for Health Incentives.

Wiseguy Tickets

If I were planning to break the laws on ticket resales, I think I would refrain from calling my company Wiseguy Tickts: 4 Charged in Concert Ticket Resale Scheme

"Federal prosecutors in New Jersey said on Monday that four men operating under the name Wiseguy Tickets had broken into online sites, buying more than one million tickets to some of the country’s most popular musical and sporting events and then reselling them for more than $25 million in profit.
In its 43-count indictment, the prosecutors say the men built a computer network that created thousands of fake accounts and built a program that could outsmart the ticketing software that creates oddly shaped letters intended to require human verification.
The events affected by the scheme cut across a wide swath of the entertainment business, from Hannah Montana concerts to Broadway shows and New York Yankees playoff games. The verification systems of many major online ticket vendors, including Ticketmaster, Telecharge and Major League Baseball, were breached."

B2B finance

Page 14 of a recent report by Morgan Stanley focuses on The Receivables Exchange, about which I have posted previously. (The Morgan Stanley report emphasizes: " This is not a research report and was not prepared by Morgan Stanley research department. It was prepared by Morgan Stanley sales, trading, banking and other non-research personnel. Past performance is not necessarily a guide to future performance.") Here it is.

The report has some recent performance statistics, and says "The Receivables Exchange, a private company, started trading on November 18, 2008 to bring private capital to the market for SME [small/medium enterprise] credit. Via The Receivables Exchange, an SME can auction its receivables to the highest bidder(s) for a substantial advance rate. The Receivables Exchange provides straight-through processing and acts as collateral agent and servicer, using an innovative approach to mitigate default risk."

Here are my previous posts about the Receivables Exchange, which strikes me as quite an interesting venture in disintermediation of credit. (Full disclosure; I'm on their advisory board.)