How the Rankings Affect State Education Spending

One study says the rankings influence expenditures per student.

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Are the U.S. News college rankings influencing higher education policy? The answer appears to be yes. The article "The Power of Information: Do Rankings Affect the Public Finance of Higher Education?" by Ginger Zhe Jin from the University of Maryland and the National Bureau of Economic Research and Alexander Whalley from the University of California-Merced says that "While there are now over 100 college guidebooks, the market is still dominated by U.S.News & World Report." The paper then examines "whether public colleges respond to one incentive provided by U.S. News: increasing expenditure per student."

The study concludes that the information contained in the rankings plays a positive role in making the public aware of the ongoing debate about academic quality. In addition, this same study looks at the role of information disclosure (college rankings) on state funding of higher education. The authors conclude that "the media can affect the public good provision (meaning the debate about public higher education funding) not only as a device for the public (state residents) to better monitor government behavior but also by raising attention to a public policy issue that was previously out of the spotlight."

The paper's other conclusions are :

...that being included in the U.S. News rankings causes public 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 appropriations per student, but tuition revenue does not respond...Our results are more consistent with the explanation with the U.S. News rankings generating increased attention to the issue of college quality.

Bottom line: This suggests that states have responded to the rankings by boosting expenditures for public colleges without directly raising tuition. This is good news for students.