Information and participation in a social program

Participation in a social program, like that in clubs and other social organizations, is the result of a process in which an agent first learns about the requirements, benefits, and the likelihood of acceptance, applies for membership, and finally is accepted or rejected. At each stage of the process, decisions made by the agent are responsive to expectations about the decisions and outcomes at the following stages. We propose a model of the participation process and estimate it using data from a social program in Mexico. We are able to distinguish empirically between information costs and other application costs, and show that self-selection due to information costs in fact contributes to targeting the program to the poorest families.