Salience in Quality Disclosure: Evidence from the U.S. News College Rankings
AbstractHow do rankings affect demand? This paper investigates the impact of college rankings, and the visibility of those rankings, on students' application decisions. Using natural experiments from U.S. News and World Report College Rankings, we present two main findings. First, we identify a causal impact of rankings on application decisions. When explicit rankings of colleges are published in U.S. News, a one-rank improvement leads to a 1-percentage-point increase in the number of applications to that college. Second, we show that the response to the information represented in rankings depends on the way in which that information is presented. Rankings have no effect on application decisions when colleges are listed alphabetically, even when readers are provided data on college quality and the methodology used to calculate rankings. This finding provides evidence that the salience of information is a central determinant of a firm's demand function, even for purchases as large as college attendance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Harvard Business School in its series Harvard Business School Working Papers with number 12-014.
Length: 29 pages
Date of creation: Sep 2011
Date of revision:
Other versions of this item:
- Michael Luca & Jonathan Smith, 2013. "Salience in Quality Disclosure: Evidence from the U.S. News College Rankings," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(1), pages 58-77, 03.
- NEP-ALL-2011-09-22 (All new papers)
- NEP-EDU-2011-09-22 (Education)
- NEP-LAB-2011-09-22 (Labour Economics)
- NEP-SOG-2011-09-22 (Sociology of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruce Sacerdote, 2001.
"Peer Effects With Random Assignment: Results For Dartmouth Roommates,"
The Quarterly Journal of Economics,
MIT Press, vol. 116(2), pages 681-704, May.
- Bruce Sacerdote, 2000. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," NBER Working Papers 7469, National Bureau of Economic Research, Inc.
- Raj Chetty & Adam Looney & Kory Kroft, 2009.
"Salience and taxation: theory and evidence,"
Finance and Economics Discussion Series
2009-11, Board of Governors of the Federal Reserve System (U.S.).
- Amy Finkelstein, 2009. "E-ZTAX: Tax Salience and Tax Rates," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 969-1010, August.
- Stefano DellaVigna & Joshua M. Pollet, 2007. "Demographics and Industry Returns," American Economic Review, American Economic Association, vol. 97(5), pages 1667-1702, December.
- Michael Luca & Jonathan Smith, 2013. "Strategic Disclosure: The Case of Business School Rankings," Harvard Business School Working Papers 14-010, Harvard Business School.
- Michael Luca, 2011. "Reviews, Reputation, and Revenue: The Case of Yelp.com," Harvard Business School Working Papers 12-016, Harvard Business School.
- C F Elliott & Kwok Tong Soo, 2012. "The International Market for MBA Qualifications," Working Papers 24284581, Lancaster University Management School, Economics Department.
- Stephen Gibbons & Eric Neumayer & Richard Perkins, 2013. "Student Satisfaction, League Tables and University Applications," SERC Discussion Papers 0142, Spatial Economics Research Centre, LSE.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Soebagio Notosoehardjo).
If references are entirely missing, you can add them using this form.