Abstract
Disadvantaged urban students attend lower-quality schools, on average, than their more advantaged urban peers. This paper asks how information about school quality affects this gap. Specifically, I examine the effects of New York City's introduction of a letter-grade system rating the quality of its high schools. The ratings shifted Black and Hispanic students' choices more than those of white and Asian students, narrowing racial gaps both in enrollment at high-quality schools and in academic achievement. Using a structural model of school choice and surveys of families, I nd that race differences in the response to quality information stem both by differing beliefs and, more importantly, by different preferences for school attributes. The model estimates suggest that Black and Hispanic students have less accurate perceptions of school quality, making them more receptive to the grade-based scoring system. Additionally, white and Asian students are less influenced by information on school quality because they have strong preferences for other school attributes. Simulations suggest that better quality information narrows racial gaps in choice and achievement. A system that releases coarse quality ratings for high-quality or oversubscribed schools increases test scores among lower achieving students more than perfect information by reducing the competition for high-quality schools from higher achieving students.