Question

Suppose a selective state flagship university employs a cutoff in test scores, which is not known at the point of application, to determine admission. How might this administrative rule, combined with the observation of earnings a decade later, be used to estimate the return to attending the state flagship university? Why would the publication of the admissions cutoff to students and families before application likely invalidate this estimation approach?

Answer 1

Hi

This is a subjective answer. I may have missed a point or two, which you might feel should have been included. Please le me know in comments, if I have missed anything.

If cutoffs are not known: This causes uncertainty amongst students whether they can be admitted to the program or not. In such a scenario, they would take their decisions ONLY on basis of earnings a decade later, which is a lot more difficult process to find alumni and get their details.
Because of this uncertainty, one might see fewer applications to the university, and hence lower cut-offs.

If, however the cutoffs to students were declared, they would be better informed about their prospects of getting into this university and they would be in a position to compare the cut-offs (or value placed by the older students on this university) with other universities. This enables a better decision making.