The significance of waitlists

According to the NYT, top colleges are digging deep into their waitlists this year, which I'm sure is like Hannukah in May for all the high-school senior boys and girls. What interests me is, why?

The biggest (and in, my opinion, least interesting) cause seems to be the scaling back of early decision. Colleges target a certain class size, and early decision locks down a portion of the class early and since people can be admitted later but not de-admitted later, colleges admit conservatively. Early decision lowers the variance of the pre-waitlist acceptances, which means colleges will aim higher than they would otherwise.

However, there are other interesting factors that may or may not be at work in this particular case, but might explain prior or future fluctuations in "waitlist depth".

Assuming away structural factors like changes in early decision policies or college preferences between having a too-empty class and a too-full class, the only reason that a college will dig deeper into its waitlist one year rather than another is that fewer of its admitted students choose to matriculate there. For an individual school, this could represent a decline in stature; however, if every high-ranking school digs deeper into its waitlist, that means the average number of letters a student sends declining matriculation at high-ranking schools has increased.

What could cause this? I can think of several possibilities:

- Increased number of applications per student. As the Common Application becomes more common, the marginal cost of applying to schools decreases, so students should apply to more schools, get accepted at more schools, and thus decline matriculation at more schools.

- Increased targetting of schools by students. In a stylized world where every student applies to one high-ranking school as their reach, every offer a top-ranking school sends out is accepted. In a world where the high-quality students are the only ones applying to high-ranking schools, and they apply to multiple high-ranking schools, this is not the case. There is a subtlety here that there may be both increased targetting due to transparency in the market (students have a better idea of their chances at getting into high-ranking schools) and due to increased stratification in quality among students.

- Increased competitive pressure from lower-ranking schools. Students may choose to attend a lower-ranked school because the school offers them a scholarship, or because the validity of the ranking itself has decreased (for a number of different possible reasons).

- Early decision, again. Early decision, along with having a subtle effect on class size targetting, has the very direct effect that students who are admitted early decision do not apply to other schools, thus reducing the total number of declines (since early decision students would otherwise have been accepted at, on average, more than one high-ranking school).

- Increased homogeneity of acceptance among universities. This is the flip side of the targetting effect, where high-ranking schools are increasingly admitting the same set of students. Stratification plays an even more important role here; if there are students who get all As, and students who get all Bs, clearly the A-students get into all the high-ranking schools and the B-students into none; however, if every student has half As, half Bs, schools must subjectively decide whether they should admit students who got an A in math or students who got an A in English, or perhaps they wish to admit a mix of both. In any case

As usual, I don't have any specific strategy in mind for identifying these different effects, but an enterprising economist (possibly a future version of myself) could attempt to piece it out. I think there might be a story here about the relationship between rising income inequality in America and educational outcomes, especially with regards to the possibility of increased quality stratification in students and to increased competitive pressure from lower-ranked schools offering scholarships.