Shopping for Schools: In the Land of the Blind, The One-Eyed Parent May be Enough

Theory: Market-like reforms, such as school choice, can work effectively in spite of the low levels of information commonly found among citizen/consumers. Hypothesis: We hypothesize that (1) parental knowledge of school characteristics is a function of ability, incentives, and whether parents believe a particular school attribute to be important; (2) parents will select schools for their children that rate high on the dimensions that they value; (3) the consumer will be more knowledgeable about schools than other parents; and (4) marginal consumers will have more accurate information on dimensions that they value and are more likely to select schools for their children that rate high on these dimensions. Methods: Multiple regression is used to predict parents' knowledge of reading test scores, racial composition of the school, and number of violent incidents. Multiple regression is also used to determine the extent to which consumers have enrolled their children in schools that are high on the dimensions about which they care. Results: We find that on low-income parents have very little accurate information about objective conditions in the schools. However, even in the absence of such objective knowledge there is evidence of a matching process in which children are enrolled in schools that are higher on the dimensions of education that their parents think are important. We then shift our analysis away from the behavior of the average parent and identify a subset of parents who are in fact informed about the conditions of the schools. We demonstrate that there is a tighter match between what these parents want and the conditions of the schools in which their children are enrolled.