Curriculum choice at A-level: why is Business Studies more popular than Economics?

This paper uses ALIS data to model the factors that influence the choice between Economics and Business Studies A-level. These subjects are often perceived as close curriculum options and possible substitutes. Subject choice is modelled using an underlying latent variable approach, which employs both a binary and an ordered probit. On the basis of a series of counterfactual exercises an overall average grade differential, a measure of their comparative difficulty in terms of students expected examination performance, is estimated to be 0.7 of an (old) UCAS point. The estimating equation suggests that a unit increase in the grade differential increases the probability of selecting Business Studies over Economics by approximately 16 percentage points. There is evidence that females are less likely to choose Economics over Business Studies, and the more able students, in terms of their average GCSE score and mathematical ability, are more likely to select Economics. There is little evidence of parental background characteristics exerting significant effects on the choice between these two subjects, but there is evidence of ethnic characteristics being significant (author abstract)