Students Don't Always Respond Rationally to Offers of Financial Aid, Economists Find

Most high-achieving students make sound decisions when evaluating financial-aid offers from colleges, but a sizable portion exhibit "hard-to-justify responses," according to a report by two economists.

In "Do and Should Financial Aid Packages Affect Students' College Choices?," Christopher Avery and Caroline M. Hoxby, of Harvard University, treat the highest-achieving students in the country as "human capital." They are "walking capital stocks," the economists say, and their choice of