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Federal Reserve Bank of New York
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Determinants of college major choice: identification using an information experiment
Matthew Wiswall
Basit Zafar

This paper studies the determinants of college major choice using an experimentally generated panel of beliefs, obtained by providing students with information on the true population distribution of various major-specific characteristics. Students logically revise their beliefs in response to the information, and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability. We estimate a rich model of college major choice using the panel of beliefs data. While expected earnings and perceived ability are a significant determinant of major choice, heterogeneous tastes are the dominant factor in the choice of major. Analyses that ignore the correlation in tastes with earnings expectations inflate the role of earnings in college major choices. We conclude by computing the welfare gains from the information experiment and find positive average welfare gains.

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Matthew Wiswall & Basit Zafar, Determinants of college major choice: identification using an information experiment, Federal Reserve Bank of New York, Staff Reports 500, 2011, revised 01 Aug 2014.
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Note: For a published version of this report, see Matthew Wiswall and Basit Zafar, "Determinants of College Major Choice: Identification Using an Information Experiment," Review of Economic Studies 82, no. 2 (April 2015): 791-824.
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Keywords: college majors; information; subjective expectations; uncertainty
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