Perceptions of Institutional Quality: Evidence of Limited Attention to Higher Education Rankings
40 Pages Posted: 27 Oct 2016
Date Written: October 26, 2016
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: Suggested Citation