Determinants of Mismatch between Student Ability and College Quality

Eleanor W. Dillon, University of Michigan
Jeffrey Smith, University of Michigan

For many people a college education is one of the most significant investment decisions they will make, both in terms of the costs of going to college and of the potential returns to that investment. We consider how students and their families make the decision of which, if any, college they will attend. While most college-bound students attend a school whose quality is fairly proportional to the student’s ability, there are many relatively weak students at competitive schools and even more high-ability students at relatively low quality schools. We investigate the causes of both of these forms of mismatch between student and college qualities, with particular attention to information constraints, financial constraints and social pressures during the college application process. Using data on a very recent cohort of college applicants, we find that all three factors contribute to college mismatch in both directions.