The informational value of affirmative action in college admissions

This article develops a theoretical model of college admissions to investigate the effects of banning affirmative action admissions policies on the efficiency of the admissions process. Previous work in this area has shown that prohibiting affirmative action causes inefficiency when college quality is an increasing function of diversity. This article identifies an additional reason why colleges and universities use racial preferences in admissions, setting aside explicit demands for diversity. In the theoretical model, the racial identity of the applicants is relevant information for making inferences about an applicant's true academic ability. Preventing admissions officers from using this information results in inefficient selection of applicants, even if diversity does not explicitly enter the objective of the university. Thus, affirmative action is justified solely on informational grounds.