|
Ginger Zhe Jin, Alex Whalley
NBER Working Paper No. 12941
Issued in February 2007
NBER Program(s): IO
An NBER digest for this paper is available.
---- Abstract -----
The recent growth in the extent and influence of college quality rankings has been extraordinary. While there are now over 100 college guidebooks the market is still dominated by U.S. News and World Report (USNWR), the first annual college ranking. In this paper we study whether public colleges respond to one incentive provided by the USNWR rankings: increasing expenditure per student. To identify the effect of college quality rankings on college expenditure behavior we take advantage of a large, plausibly exogenous shift in the scope of the USNWR rankings in 1990. Specifically, in 1990 USNWR extended the number of colleges included in the rankings from only the top 25 to all national universities and colleges. Using college level data from 1987 to 1995 we first find that being included in the USNWR rankings causes colleges to increase educational and general expenditure per student by 3.2%. The increase in expenditure is funded by a 6.8% increase in state appropriation revenue per student, but tuition revenue does not respond. Second, the positive state appropriation response is not primarily driven by the updating of college quality priors from a pre-USNWR college guide. Instead our results are more consistent with the explanation that USNWR rankings generate increased attention to the issue of college quality.
Would you like an annual subscription to NBER Working Papers? Click
here for more information.
You may purchase this paper on-line in .pdf format
from SSRN.com ($5) for electronic delivery.
Information for subscribers and others expecting no-cost downloads
This paper was revised on December 27, 2007 Machine-readable bibliographic record -
MARC,
RIS,
BibTeX
| 
