The Economics of University Rankings

How do students choose their place of study? Surely, lots of issues need to be taken into account when it comes to finding the right university – what do friends do, where would you like to live, etc. What matters most for many aspiring new students is the quality of teaching and research, however. Will I get good value for my money? Is my university recognised for its research output, or has nobody ever heard about them at all? Career concerns matter more than ever these days, and competition for the best places to study is fierce indeed. What used to be a fairly straightforward decision to make back in the old days, has become one of the most important strategic steps in one’s early career.

This is particularly true for economics students. City employers place great emphasis on an immaculate CV, are looking for the right blend of academic achievement, working experience and non-curricular commitments. So it’s no surprise that practically every week a national newspaper, TV or radio station, or internet blog, would publish new university league tables and rankings. Needless to say, the results are most contradictory. Whereas a certain overlap among the ‘usual suspects’ in the top five can be expected, the similarities end right there. Regrettably, it seems that these league tables simply add more to the confusion. Glossy university prospectuses need to be read with care – you wouldn’t really expect a university to publish unfavourable results, or would you?

For postgraduate students, matters are even worse. Often, league tables do not indicate how a ranking is calculated exactly: what is being measured, and how? What are the weights? Have teaching and research staff been involved in the assessment? Whereas for undergraduates the quality of teaching is of utmost importance, for a PhD student the availability of resources might matter much more: will my supervisor have enough time for me, or will she or he be too busy teaching? Are there other postgrads around with similar research interests? And how should one empirically assess quality standards in the first place? Economics departments are often the biggest and, in terms of finance, the most important ones at their universities, so making a good choice seems imperative.

Let’s fold away our papers then and have a more serious look at what peer-reviewed academic journals have to say about this matter. I turn to IBSS, and simply search for ‘rankings’ in the title field and ‘universities’ in the general section – otherwise, the number of hits would be just too high to digest. My search yields a good 58 records, more than enough to get a good overview

The most recent article I find of relevance for PhD students is Rabah Amir and Malgorzata Knauff’s ‘Ranking economics departments worldwide on the basis of PhD placements’ (2008). The authors look at 58 economics departments and explain in detail their statistical methodology, something that is clearly amiss in many mainstream league tables. The main point for them is how successful PhD economists are in finding a proper job. The MIT, Harvard and Stanford are the top three places according to this study. This doesn’t come as a surprise – more interestingly, the midfield displays quite a variety of schools inside and outside the US. In ‘Ranking economics journals, economics departments, and economists using teaching-focused research productivity’ Melody Lo, M.C. Sunny Wong, Franklin G. Mixon, Jr., (2008), the focus is a different one. Here, the authors take a closer look at the quantity and quality of research that is being produced. They point out that that many smaller colleges that wouldn’t make their way to the top in traditional rankings, fare surprisingly well using this framework. For postgraduates, or indeed research staff who look for employment elsewhere, this can give really valuable findings. Searches on IBSS retrieve similar studies for other popular countries for postgraduate study, e.g. Australia, New Zealand, and of course the UK.

Finally, a note of caution: are we worrying too much about league tables, rankings, and figures altogether? Is a small number in a table all that matters for such a profound choice as the place of study? Many will agree, and it is important to be critical about rankings: to what extent do they simply contribute to short-lived hype? The reason to go to university should be more than the admittedly understandable wish to impress potential employers. A critical assessment of rankings by those who conduct and sell them is perhaps a bit too much to expect. Again, IBSS proves useful to all those who aim to fundamentally investigate the nature of rankings as such. Do they work at all, and if they don’t, why not? Michael McAleer (2005) ‘The ten commandments for ranking university quality’, writes up what good rankings should measure, and how. ‘Academic quality, league tables, and public policy: a cross-national analysis of university ranking systems’, David D. Dill, Maarja Soo (2005) takes a general look at indicator-based public policy analysis. ‘To rank or to be ranked: the impact of global rankings in higher education’, Simon Marginson, Marijk van der Wende (2007) investigates the effects of rankings on the higher education community. For good and for bad, rankings and indicators will play an increasingly important role for education policy assessments and the distribution of research grants, not just for economics students and researchers. Much more debate on this matter is to be expected – inspired, hopefully, by more serious assessments of what rankings can provide, and where they fail.