I investigate three goals of school choice: student welfare, encouraging neighborhood schools, and diversity. I develop a framework for finding the optimal match for any combination of these objectives while respecting stability and incentive compatibility. I then apply my framework to data from...

We model the teacher-student relationship as an agency problem, where teachers are concerned with human capital formation and students --- ability signaling. The model's distinctive feature is that with grading rules unobservable for the job market the teacher finds grades costless incentives....