Perceptions of institutional quality: Evidence of limited attention to higher education rankings

Rankings of colleges and universities provide information about quality and potentially affect where prospective students send applications for admission. We find evidence of limited attention to the popular U.S. News and World Report rankings of America's Best Colleges. We estimate that applications discontinuously drop by 2%-6% when the rank moves from inside the top 50 to outside the top 50 whereas there is no evidence of a corresponding discontinuous drop in institutional quality. Notably, the ranking of 50 corresponds to the first page cutoff of the printed U.S. News guides. The choice of college 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. (C) 2017 Elsevier B.V. All rights reserved.