Which universities deliver the best “feelgood” experience?

THERE is no shortage of college rankings, nor rankings that tell you what you already know. Ivy League colleges are prestigious and selective. Graduates of business schools tend to do well, and skilled engineers are in high demand. For college applicants trying to make a choice between attending multiple colleges, such rankings have one critical shortcoming: they draw no distinction between the quality of a university’s institutions versus the quality of its student body. The fact that Harvard graduates tend to do well on the job market doesn’t necessarily mean that they’ve received a superior education—it simply may be the case that Harvard graduates are successful because their alma mater is very good at attracting bright students.

For students trying to decide between multiple colleges, perhaps the most important question to ask is not how a university is perceived by others but rather how much they personally will benefit from attending. Last October, The Economist attempted to answer this very question by creating a value-added college ranking (available here). To do so we first built a model predicted how much graduates of particular colleges could be expected to earn based on factors like student ability (SAT scores), family incomes, where the college was located and what subjects the students studied. We then ranked every college in our database by the difference between their graduates’ actual earnings minus their expected earnings. The colleges whose graduates most outperformed expectations were ranked highest.
While we believe that our value-added ranking is a useful guide for college applicants trying to maximise their earnings potential, they certainly don’t address the needs of everyone. Contrary to the views of some miserly economists, a college education is about far more than just money; what about those who want to maximise their *spiritual* returns?
This April 1st, in the interest of open-mindedness we present our first-ever Feelgood college rankings (see table). Unlike an earnings-based ranking, the methodology for ranking colleges by their intangible benefits is not obvious, since intangible benefits are well, intangible. We believe we have a way of doing so, though it requires us to make two fairly standard economic assumptions and push them to unreasonable extremes.
First, we assume that college applicants have perfect information—that is, every 18-year-old across America knows everything there is to know about the earnings potential of every degree from every college in the country. We also assume that college applicants are perfectly rational. Consequently, any differences in the average earnings between graduates of different colleges of the same calibre can be explained by differences in the lifestyle preferences. Viewed from this perspective, Harvard graduates make more than their Yalie counterparts not because they are better educated but because they have to be paid more to compensate for their less fulfilling careers.
Next, we build a slightly-modified version of our graduate earnings model, and once again compare those results with college graduates’ actual earnings. This time around however, we rank the colleges whose graduates earn less than expected at the top as it’s clear that they’re the ones whose graduates are experiencing the most joy out of life. For leisure-minded students trying to decide between colleges, our Feelgood rankings can offer some immediate lessons. Graduates from liberal-arts and bible colleges tend to fare the best by our metrics, enjoying thousands of dollars a year worth of spiritual fulfilment. Sitting in first place is Reed, a liberal-arts college in Oregon, whose students are known for both their intellectual curiosity and relaxed social attitudes.
Business-oriented schools are to be avoided. Georgetown and Penn, two universities known for producing disproportionate numbers of bankers and lawyers, fare especially poorly in our rankings. According to our model, their graduates have to be paid an extra $17,000 a year on average to cope with the indignities of working on Wall Street. Sitting at the very bottom of our rankings is none other than Harvard University, which cruelly sends a third of its graduating class into finance and consulting.
Both students at both our top-ranked college, Reed, and our bottom-ranked college, Harvard, tend to have stellar academic credentials, yet they experience radically different job-market outcomes. According to data from College Scorecard, 28-year-old Harvard graduates can expect to make $87,000 a year, while compared to just $36,000 a year for Reed graduates. For an 18-year-old college applicant, a decision between the two college can equate to a difference of some $2.4m in lifetime earnings, or $700,000 in present-value terms. A life of leisure, though priceless, can certainly be costly.