The Power of Information: How Do U.S. News Rankings Affect the Financial Resources of Public Colleges?

45 Pages Posted: 18 Feb 2007

See all articles by Ginger Zhe Jin

Ginger Zhe Jin

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Alexander Whalley

University of California, Merced - School of Social Sciences, Humanities and Arts; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: Feburary 16, 2007

Abstract

In 1990, the U.S. News & World Report (USNWR) extended the coverage of its college rankings from only the top 25 to all national universities and colleges. This paper utilizes this exogenous information shock to identify the impact of college quality information on the financial resources of public colleges. Using college level data from 1987 to 1995, we have three main findings: first, USNWR coverage causes colleges to increase educational and general expenditures per student. Second, these expenditure responses are funded by a 6.5% increase in state appropriations per student, but tuition revenue does not respond. Third, the state appropriation response to USNWR exposure is larger the larger the pre-college age population, voter turnout and USNWR newsstand sales are in a state. These heterogeneous responses are consistent with the USNWR rankings reducing the scope for political agency. Thus our results suggest that, in addition to a consumer response, the publication of quality rankings may influence the provision of quality through a political channel.

Keywords: information, quality ranking, political agency, higher education

JEL Classification: D80, I23, I22, L15

Suggested Citation

Jin, Ginger Zhe and Whalley, Alex, The Power of Information: How Do U.S. News Rankings Affect the Financial Resources of Public Colleges? (Feburary 16, 2007). Available at SSRN: https://ssrn.com/abstract=963194 or http://dx.doi.org/10.2139/ssrn.963194

Ginger Zhe Jin (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3484 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alex Whalley

University of California, Merced - School of Social Sciences, Humanities and Arts ( email )

P.O. Box 2039
Merced, CA 95344
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
266
Abstract Views
1,844
Rank
138,722
PlumX Metrics