Perceptions of Institutional Quality: Evidence of Limited Attention to Higher Education Rankings

40 Pages Posted: 27 Oct 2016

See all articles by Andrew Meyer

Andrew Meyer

Marquette University

Andrew Hanson

Marquette University- Department of Economics

Daniel Hickman

University of Idaho - College of Business & Economics

Date Written: October 26, 2016

Abstract

Rankings of colleges and universities provide information about quality and potentially affect where prospective students choose to send applications for admission. We find evidence of limited attention to the popular U.S. News and World Report (USNWR) rankings of America’s Best Colleges. We estimate that applications discontinuously drop by 2% to 6% when the USNWR rank moves from inside the top 50 to outside the top 50 whereas there is no evidence of a corresponding discontinuous drop in in institutional quality. This threshold is likely the most salient to students because it corresponds to a page break in the printed USNWR guides but we also find some evidence of a discontinuity at the rankings threshold of 100. The choice of college or university is typically a one-time decision with potentially large repercussions, so students’ limited attention to rankings likely represents an irrational bias that negatively affects welfare.

Keywords: Higher Education, Decision Heuristics, Limited Attention, Salience

JEL Classification: D03, D83, I23

Suggested Citation

Meyer, Andrew and Hanson, Andrew and Hickman, Daniel, Perceptions of Institutional Quality: Evidence of Limited Attention to Higher Education Rankings (October 26, 2016). Available at SSRN: https://ssrn.com/abstract=2859666 or http://dx.doi.org/10.2139/ssrn.2859666

Andrew Meyer (Contact Author)

Marquette University ( email )

1225 W. Wisconsin Avenue
Milwaukee, WI 53233
United States
414-288-5489 (Phone)

Andrew Hanson

Marquette University- Department of Economics ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

Daniel Hickman

University of Idaho - College of Business & Economics ( email )

Moscow, ID 83944-3174
United States

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