LRP participation is a joint outcome of application and acceptance. But this process is unobservable, and we only observe the outcomes of participation and non-participation. We denote the unobservable factors related to admission in the population of applicants with γi, where i represents the individual program participant. The term γi can be viewed as the individual’s ‘fit’ for the program. Fit for the program depends in part on observable factors such as academic background. Fit may also be related to the strength of an individual’s preference for a particular NHSC location (i.e., θj). We assume that NHSC ranks applicants in order of fit for the program and then fills all available spaces in the program. Rejection occurs when there are more applicants than spaces.
Exactly who is selected into the program depends on the weight NHSC places on factors other than preferences (e.g., academic background) during the selection process and the weight it gives to preferences. If fit for the program were based only on preferences, preferences would receive all of the weight and the rank-order of fit for the program would be identical to the rank-order of individuals’ location preferences. In this case, preferences and fit would be perfectly correlated and the program would select the same individuals who would have the strongest preferences for service in high-need areas in the absence of the program. At the other extreme, if preferences received no weight in the selection process and other factors such as academic ability received all of the weight, preferences and fit would have no correlation. In this case, the program would tend to attract the highest number of individuals who would be unlikely to serve in an underserved area in the absence of the program.