Institution or major? Understanding student preferences in college admissions

Abstract In many countries outside the United States, students must choose an institution–major pair simultaneously, creating a trade‐off between institutional prestige and field of study. Using data from Taiwan's centralized admissions system, we study how applicants navigate this choice. We find that students strongly prioritize institutional ranking, with little heterogeneity across demographic groups and only a weak link between program choice and expected earnings. Counterfactual analysis shows that students forgo about 15% of their annual income by favoring institutions over earnings‐maximizing alternatives, suggesting that nonpecuniary factors—especially institutional reputation—play a central role in shaping college decisions.