Love them or hate them, the U.S. News and World Report rankings have serious implications. If a school rises on the list, it may become more desirable, attracting more applicants and better hires, and the opposite potentially may happen if a school’s rating drops. With so much at stake, and so many complicated factors to be calculated and self-reported by each school, moral hazard is inevitably present. And that’s a troubling incentive, for the same reasons that the pressure to “make the numbers” each quarter is problematic in the corporate context.
But at least in the corporate arena, the accuracy of the data reported is audited, and the CEOs of the companies have to certify that the data is correct. This was re-emphasized by the Sarbanes-Oxley Act, passed in 2002, which has as its goal better corporate governance, as well as accuracy and transparency in reporting. With the U.S. News rankings, we’re talking about a magazine, a private entity, that reports the data as it is given to them.
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