Peer quality, not school effectiveness: school choice in nYC

School choice may lead to improvements in school productivity if parents' choices reward effective schools and punish ineffective ones. This mechanism requires parents to choose schools based on causal effectiveness rather than peer characteristics.

This study examines relationships among parent preferences, peer quality, and causal effects on outcomes for applicants to New York City's centralized high school assignment mechanism. The authors use applicants' rank-ordered choice lists to measure preferences and to construct selection-corrected estimates of treatment effects on test scores and high school graduation. They also estimate impacts on college attendance and college quality.

Parents prefer schools that enroll high-achieving peers, and these schools generate larger improvements in short- and long-run student outcomes. The authors find no relationship between preferences and school effectiveness after controlling for peer quality.