A new ranking of U.S. universities

One way to find out what people prefer among available products is to ask them -- this is the method that pollsters, telephone surveys and questionnaires use. It is common knowledge, however, that what people say they prefer and what they actually buy can be very different. So many producers of products have turned to a different approach -- the so-called "revealed preference" approach puts a product out in the marketplace and then monitors to see how many people actually buy it. These people -- and the marketplace -- reveal their preferences by their actions.

Most rankings of universities are based on a mix of dean's evaluating each other, recruiters evaluating where they hire students, some student input, number of applicants, admission rates, average SAT scores, funding levels and other factors. This is the approach that some of the more well-known surveys take, such as the annual U.S. News and World Report rankings.

Now a new approach has been used. The argument for it is given in summary in the New York Times:

Now, a group of economists has compiled a new college ratings system that does just that.

In a study submitted last week to the National Bureau of Economic Research, Harvard and Yale not unexpectedly take the top two spots. But the authors contend that their method of rating colleges and universities based on the real-life decisions of admitted students is more accurate and more relevant than rankings published each fall in college admissions guidebooks and magazines, like U.S. News and World Report.

After the top ten (Harvard and Yale are #1 and #2, respectively), there are a few surprises: Washington University in St. Louis, for example, was tied for the No. 11 spot in this year's U.S. News list of national universities; it was the 62nd rated choice when students' preferences were revealed. The University of Pennsylvania, the University of Chicago and Duke placed at least eight spots lower on the preference ranking than on the U.S. News list.

Here is the article describing the revealed preference methodology used and the full list of the top 105 universities.

There are critics of this approach, calling it a "popularity contest" and making the argument that just because a lot of high school students want to go to a school doesn't make that school high quality -- it just makes it popular. Nevertheless, even the critics agree that the listing provides some useful information.