Social Interactions, Information, and Preferences for Schools: Experimental Evidence from Los Angeles

This paper measures parents’ beliefs about school and peer quality, how information about each affects school choices and student outcomes, and how social interactions mediate these effects. Parents underestimate school quality and overestimate peer quality. Cross-randomized school and peer quality information combined with a spillover design shows that when parents received information, they and their neighbors’ preferences shifted toward higher value-added schools, underscoring stronger tastes for school quality and the role of social interactions. These demand responses translate into real educational gains. Students exposed to the improved information enroll in more effective schools, achieve higher test scores, report improved socio-emotional well-being, and are more likely to enroll in college. The experimental evidence shows parents value school effectiveness even conditional on peer quality and that improving the informational environment can elevate numerous policy-relevant outcomes.