Signaling, SAT Coaching, and Selective College Admissions

We investigate how SAT coaching (also known as “SAT Prep”) affects the value of the SAT as an evaluative tool, vis-á-vis other applicant signals such as high school transcript and letters of recommendation. Theoretically, we develop a simple “meritocratic” model of selective college admission that illustrates how SAT Prep may alter the emphasis a college places on SAT scores, depending on perceived SAT Prep efficacy and participation. Empirically, we review existing empirical studies of SAT Prep and conduct our own analysis, using new data from the 2006-07 Orange County (CA) operation of a major SAT Prep firm, to explore actual SAT Prep efficacy and participation. We find that SAT Prep seems to help disproportionately students who are weaker in the tested aptitudes but have academically achieved more, as measured by grades (GPA) and observable quality of attended high school. Our research suggests, perhaps counterintuitively, that the presence of SAT Prep may provide modest incentives for selective colleges to emphasize the SAT more in their admission deliberation.