What does a high number of deferrals imply?
Have the business schools offered many deferrals? Does that mean that the net available seats will be lesser and it will become tougher to be admitted?
Yes, the number of deferrals have been higher than usual. The available seats might be lesser for the next admission cycle. By how much is another question. The competition will definitely become tougher.
There are some pre existing econometrics models which address these decision making problems.
The number of students who are offered an admit by any school (this does not refer to any specific school) has historically been analysed using three algorithms:
1. Gale - Shapely Model - Deferred-acceptance algorithm, 1962
2. The Boston Mechanism
3. The Top Trading Cycles (TTC) Mechanism
The situation where these models are used is when the school has to decide how many offers should be extended over a given number of seats available.
Empirically, the schools decide the offers they give out assuming a variance attributed to some factors that they cannot know for sure:
1. If the applicant has applied elsewhere
2. What is the applicant's ranking of the colleges
3. Which other schools will extend the applicant an offer of admission
These models basically give a basis for the school to decide how many offers they want to give for a certain number of available seats.
Assuming the school and the students to be the involved parties in this decision, there is a stochastic relationship between the information held by both the parties. Empirically, for the above models, it has been observed that when there is information involved, there are other active elements like manipulation and truth telling. Though these models can predict the deferral acceptance rates empirically, they assume to quite an extent that the preferences of both the parties are stable.
Evaluating the preferences of both the parties one by one. We assume that the schools have a fairly stable preference for the applicants who would be offered an admit. It chooses the admits from the available pool of applicants according to its criteria.
On the other hand the situation is fairly volatile for the applicants which might impact the actual availability of seats. For example if a school offers 300 admits, will all 300 applicants join the next year?
Empirical research has also stated that the availability of seats in spite of the large number of deferrals given by any school is also dependent on the probability of various non mathematical circumstances.
There are again many variables at play here:
1. Economic situation of the world and the country at large.
2. Whether the applicant would actually like to withdraw from the workforce for a year to invest in higher education the next year.
3. Would the applicant get more lucrative offers from other schools.
4. Would the applicant get accepted at a higher "ranked" school in terms of personal preferences.
The cost of education includes the direct cost of education and the opportunity cost. COVID has introduced a larger variability in the opportunity costs for the timing of the decision to pursue higher education.
The expected lifetime benefit of higher education thus plays an important role now. It has been found by studies that deferred applicants worked after being deferred and during that time received new salary offers raising their opportunity costs even more. This reduced their chances of accepting offers the next year.
How this spans out in an uncertain COVID situation is unclear but it gives food for thought to add realism to the analysis of the question and the panic related to the assumed reduction of seats and the ROI of higher education. It's time you deeply analyse your profile and formulate an application strategy.
Refer: D. Gale and L. S. Shapley
The American Mathematical Monthly
Vol. 69, No. 1 (Jan., 1962), pp. 9-15