Research

• Measuring the Welfare Cost of a Misperceived Tax: Evidence from College Financial Aid

(Updated June 2026)

With Joseph Gray-Hancuch and Paul Organ

Abstract: College financial aid in the US creates a large implicit tax on parent income. Like many taxes, it is difficult to learn one’s tax rate. Using federal tax data, we provide the first estimates of the elasticity of parent income to the college aid implicit tax. We show how to combine this elasticity with survey data to identify deadweight loss from the tax, given that individuals misperceive their tax rate. Misperception of the college aid implicit tax increases deadweight loss by 127%, driven by substantial heterogeneity in misperception across individuals.

• Achieving Race-based Equity through Race-blind Policies: Evidence from a Local Preference in College Admissions 

With Johnny Huynh

Abstract: We study the enrollment and equity effects of a unique college admissions policy: a preference in admissions for students applying from local high schools. In the mid-2000s, 18 California State University (CSU) campuses were mandated to prioritize applicants from local high schools; however, only nine campuses offered a meaningful local preference in practice, which we call “adherent” campuses. We estimate the effects of exposure to a local admissions preference using a difference-in-differences design that interacts an indicator for being local to an adherent campus with an indicator for being pre or post policy implementation. Our results show that the policy induced students to enroll at their local campuses, without evidence of crowd-out from other public four-year colleges in California. Effects are only found for students from high schools with a high share of underrepresented minority (URM) students. As a result, the formally race-blind local preference policy nearly eliminates the pre-existing gap in enrollment at California public four-year colleges between students from high and low URM share high schools.