College admissions with entrance exams: Centralized versus decentralized

Abstract

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College choice, selection, and allocation mechanisms: A structural empirical analysis

“…and at times consist of two stages. The first stage selects out students at minimal costs while the second stage allows for a costly but more precise evaluation (Hafalir, Hakimov, Kübler, and Kurino ()).…”

“…We allow students to choose colleges after passing the first‐stage exam instead of having them to choose before this exam. This allocation mechanism is quite popular, as in Japan for instance (Hafalir et al ()). As expected, it has strong redistributive effects between schools and between students since it favors more opportunistic behavior.…”

“…The most obvious distinction between college admission procedures is their degree of centralization. Decentralized models of college choices, as in the United States, are studied by Chade, Lewis, and Smith (), Che and Koh (), and Hafalir et al () among others. In the last paper, low and high ability students are shown to have different preferences over centralized and decentralized mechanisms and a small amount of literature about centralization is surveyed there.…”

“…It also streamlines the competition between colleges. Yet, centralization assumes that college preferences are adequately translated by the information revealed at a general exam (Hafalir et al ()). In a decentralized system like in the US, many other elements than the SAT score are evaluated and the selection is multidimensional.…”

“…The two‐stage exam set‐up tries to mitigate the reduction in selection quality. The selection mechanism used in our empirical illustration is broadly akin to the Japanese experience in which a first stage centralized exam is followed by a second‐stage exam decentralized at the level of each university on the same day which effectively avoids congestion (see Hafalir et al ()). The choice of college and the sequential exams are also akin to the system now in place in South Korea (Avery, Lee, and Roth ()).…”