Professor Caroline Hoxby from Stanford gave a talk about her project with Sarah Turner (Virginia) on expanding college access for low-income capable students. This study sheds light on the importance of information on making life choices and the often underestimated impacts of peers in personal development.
She motivated the topic by showing the audience the college application decisions of high-achieving students from rich and poor families. The differences are striking. Students from high-income families apply to a carefully constructed portfolio of schools, most of which closely match their abilities (in terms of test scores). They apply to a few “safe choices” just to back up. Students from low-income families, however, rarely have a portfolio. Many of them apply to nonselective colleges which are much worse than what they can possibly get. A question naturally arises: Since low-income high-achieving students know their ability levels by pre-test scores, why don’t they apply for good schools which provide them with better resources?
Several explanations are proposed. The most convenient explanation is students from poor families are worried about high costs of better schools. But a closer look at the college costs lowers the credibility of this claim. Colleges which are more selective are actually cheaper to attend — probably because they have better finances and offer more scholarships. Note that low-income students may not know this fact. And lack of such information is likely to deter them from applying for good schools. Another hypothesis is that the matching between universities and poor students do not happen as efficiently as we would like to. Low-income students are spread out and universities may not have publicized enough to this geographically dispersed population. The third explanation is that they simply don’t want to go to a selective college. The distant, uncertain benefits of going to a school with higher ranking may not be high enough to justify the pain from leaving home and friends. Sticking with what you are familiar with is always a safe choice.
With these thoughts in mind, Professor Hoxby designed a randomized controlled trial measuring how different interventions impact college application decisions among low-income high-achieving student. For one treatment group, she mailed application brochures containing guidance from informed high school counsellors about college choices. The brochures are considerately customized, including comparisons between schools outside their states and schools within states which they are more familiar with. There are two other treatment groups: fee waiver group and parent intervention group. The former provides coupons for application fees (which these students are eligible for in the first place) , while the latter provides customized college application guidance emphasizing parents’ concerns (e.g. costs) and written in simpler language.
Their econometric model is very simple. They didn’t include co-variates because none of those were significant. Results suggest that fee waiver coupons seem to serve as “earnest money”. Students are much more likely to look at the materials inside the envelop if they see the free money first. This may also release the guard of parents, who often open their kids’ envelops. Treatment group students are indeed more likely to apply schools which match their abilities.
The data have just come out and is only a one-year survey. Much remains to be learned about the academic performance, social networks, earnings, and other choices of these individuals in the future. With survey data, response rate is always a problem. In this case, a big proportion of the treatment group students didn’t even look at the materials. This restricts the power of the conclusion as we now have a limited and probably censored sample of treated observations. Making things clear is an inherent difficulty in this survey: they were only able to provide students with very limited information of this study or students will find out the aim and incentives will be distorted.