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How do college students form expectations?

Author

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  • Basit Zafar
Abstract
This paper focuses on how college students form expectations about various major-specific outcomes. For this purpose, I collect a panel data set of Northwestern University undergraduates that contains their subjective expectations about major-specific outcomes. Although students tend to be overconfident about their future academic performance, they revised their expectations in expected ways. The updating process is found to be consistent with a Bayesian learning model. I show that learning plays a role in the decision to switch majors, and that major-switchers respond to information from their own major. I also present evidence that learning is general and not entirely major-specific.

Suggested Citation

  • Basit Zafar, 2009. "How do college students form expectations?," Staff Reports 378, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:378
    Note: For a published version of this report, see Basit Zafar, "How Do College Students Form Expectations?" Journal of Labor Economics 29, no. 2 (April 2011): 301-48.
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    References listed on IDEAS

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    More about this item

    Keywords

    college majors; expectations; learning;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • I2 - Health, Education, and Welfare - - Education
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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