Com­pe­ti­tion has the po­ten­tial to weed out rank­ings that are less use­ful or re­li­able

The Financial Express - - FRONT PAGE - Nirvikar Singh

In my last col­umn, I of­fered some pre­lim­i­nary thoughts on the new gov­ern­ment rank­ings of In­dian higher ed­u­ca­tion in­sti­tu­tions. One of the is­sues that have sur­faced with these rank­ings is that of qual­ity and re­li­a­bil­ity of the rank­ings them­selves. Po­ten­tial prob­lems in­clude dis­tor­tion of self-re­ported in­for ma­tion, in­flu­ence by in­ter­ested par­ties (for ex­am­ple, politi­cians with stakes in par­tic­u­lar ed­u­ca­tion in­sti­tu­tions), and the ap­pro­pri­ate­ness of the in­for­ma­tion used in the rank­ing, and of the ag­gre­ga­tion process. The last of these con­cerns seems un­war­ranted, given the trans­parency of the process and the in­for­ma­tion, al­low­ing out­siders to con­struct their own in­dices and rank­ings from com­po­nents of the data.

One of the is­sues that I dis­cussed in gen­eral terms was the pos­si­bil­ity of mul­ti­ple sources of rank­ings, and what this would mean for prospec­tive stu­dents and par­ents. In fact, for busi­ness schools or pro­grammes and for en­gi­neer­ing col­leges in In­dia, there are in­deed mul­ti­ple such rank­ings, some of them dat­ing back over a decade. In fact, Wikipedia pages ex­ist that com­pile these rank­ings side-by-side, al­low­ing any­one with In­ter­net ac­cess to be­gin a pre­lim­i­nary anal­y­sis of ed­u­ca­tion options in their cho­sen field.

For busi­ness or man­age­ment schools and pro­grammes, there has been a strong de­mand for such rank­ings for some time, and pri­vate providers have stepped in read­ily. Of­ten, these are busi­ness-re­lated mag­a­zines, and they have been crit­i­cised in the past for be­ing in­flu­enced by ad­ver­tis­ing spend­ing, or for us­ing method­olo­gies that were in­suf­fi­ciently quan­ti­ta­tive or ob­jec­tive. Nev­er­the­less, they have mostly sur­vived, and have im­proved over time. For ex­am­ple, Busi­ness To­day of­fers a rank­ing of 269 pro­grams or schools, many more than there are in the gov­ern­ment rank­ings. A web­site pro­vides a search­able ta­ble, with over­all scores and rank­ings, as well as scores on com­po­nents that are sim­i­lar to the ones in the new gov­ern­ment rank­ing (for ex­am­ple, learn­ing ex­pe­ri­ence and place­ment per­for­mance).

These pri­vate rank­ings are broadly sim­i­lar in char­ac­ter to the new gov­ern­ment rank­ings—pro­grammes or schools that do well in one rank­ing are likely to be highly ranked else­where. And any­one can ex­plore the sources of dif­fer­ences and learn from them to some ex­tent. For ex­am­ple, the gov­ern­ment rank­ing gives some weight to re­search qual­ity, which does not seem to fig­ure in the Busi­ness To­day rank­ings (at least not so ex­plic­itly), and to in­clu­sion, which is again not so prom­i­nent in pri­vate sec­tor rank­ings. The pri­vate-rank­ing web­sites (and other web­sites for po­ten­tial stu­dents) carry com­ment threads where prospec­tive stu­dents can ask for in­for­ma­tion from grad­u­ates or other in­for­ma­tion-seek­ers). Es­sen­tially, there is a mar­ket for in­for­ma­tion, which cus­tomers can ac­cess to in­form their choices: it is not a per­fect mar­ket, but it is bet- ter than a sit­u­a­tion where in­for­ma­tion is scarce or ar­ti­fi­cially re­stricted.

Be­sides of­fer­ing new di­men­sions of com­par­i­son, like re­search qual­ity, the gover nment rank­ings also have filled in some gaps in in­for­ma­tion. For ex­am­ple, IIM Ban­ga­lore had never par­tic­i­pated in the Busi­ness To­day rank­ings, but heads the new gov­ern­ment rank­ing. Even when dif­fer­ent rank­ings cover the same in­for ma­tional ground, they may of­fer dif­fer­ent as­sess­ments, al­low­ing a prospec­tive stu­dent to weigh the in­for ma­tion across sources. There is a bur­den in do­ing this, but this is pre­sum­ably a ben­e­fit-cost de­ci­sion that the stu­dent can take. As we know, some­times con­sumers and even vot­ers make choices based on less than the to­tal in­for­ma­tion that is avail­able, be­cause it is not worth their while to do a com­plete anal­y­sis. Com­pe­ti­tion has the po­ten­tial to weed out rank­ings that are less use­ful or re­li­able. For ex­am­ple, in 2010, CRISIL, a credit rat­ings fir m, launched its own busi­ness school grad­ing—these were in ter ms of a mod­i­fied let­ter grade sys­tem, rather than nu­mer­i­cal scores or ex­plicit rank­ings. Rat­ings were pro­duced for about 45 in­sti­tu­tions, and are still avail­able on the Crisil web site. But clearly the ser­vice never took off, since the rat­ings are out-of-date, and never seem to have been re­peated for any in­sti­tu­tion. Each rat­ing is ac­com­pa­nied by a one page qual­i­ta­tive sum­mary, which is in­ter­est­ing and use­ful, and even pro­vides in­for ma­tion on ar­eas of stronger per­for mance ver­sus ar­eas of im­prove­ment. Var­i­ous di­men­sions of di­ver­sity are also con­sid­ered. What­ever its pos­i­tives, how­ever, the Crisil rat­ings could not com­pete with other in­for ma­tion of­fer­ings.

Ul­ti­mately, just as the In­dian higher ed­u­ca­tion sec­tor is it­self un­der­go­ing change, rank­ings of busi­ness schools and other ed­u­ca­tion in­sti­tu­tions are go­ing to be part of a dy­namic process. Adding more in­for ma­tion is good, and de­vel­op­ing tools to ag­gre­gate and an­a­lyse in­for ma­tion in mul­ti­ple di­men­sions and from mul­ti­ple sources is also valu­able. If ser­vice-providers com­pete for cus­tomers and those cus­tomers are bet­ter in­for med about their options, mar­kets will op­er­ate more ef­fi­ciently. This does not guar­an­tee that mar­kets are per­fect, and mon­i­tor­ing and con­trol­ling for fraud is im­por­tant as well. Con­sumer pro­tec­tion laws and a more stream­lined, bet­ter-func­tion­ing le­gal sys­tem are another piece of the puz­zle that In­dian pol­i­cy­mak­ers will have to ad­dress. But higher ed­u­ca­tion, es­pe­cially grad­u­ate pro­fes­sional ed­u­ca­tion, is one area where con­sumers can make in­tel­li­gent choices if they have ac­cess to good in­for ma­tion. That needs to be the reg­u­la­tory fo­cus, rather than cen­tralised con­trol of how in­sti­tu­tions are set up and run.

Higher ed­u­ca­tion, es­pe­cially grad­u­ate pro­fes­sional ed­u­ca­tion, is one area where con­sumers can make in­tel­li­gent choices if they have ac­cess to good in­for­ma­tion

The au­thor is pro­fes­sor of eco­nomic, Uni­ver­sity of Cal­i­for­nia, Santa Cruz

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