Do Parents Value School Effectiveness? -- No, they favor schools that enroll high-achiving peers.

Do Parents Value School Effectiveness? Atila Abdulkadiroglu, Parag A. Pathak, Jonathan Schellenberg, Christopher R. Walters. NBER Working Paper No. 23912. http://www.nber.org/papers/w23912

Abstract: 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. We study relationships among parent preferences, peer quality, and causal effects on outcomes for applicants to New York City's centralized high school assignment mechanism. We 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. We 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. We find no relationship between preferences and school effectiveness after controlling for peer quality.

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My commentary: Parents seem to choose schools with high-achieving peers due to lack of good information about effectiveness. In some way, they are free-riding on others' work of ascertaining quality/effectiveness.