Doctoral Dissertation Research in Economics: Selling College: The Effect of Advertising on Enrollment Choices and Student Outcomes

University Of Wisconsin-Madison, Madison WI

Investigators

Abstract

A college education can be a vehicle for economic opportunity and social mobility, but prospective students with less educated parents or lower-income backgrounds often lack information about available college options and their benefits and costs. Given this, and the complexity of the higher education market, it comes as little surprise that U.S. colleges—mostly for-profit schools—have spent as much as $1.65 billion annually on advertisements in recent years. Despite the proliferation of college ads, little is known about how advertising impacts enrollment choices, and whether it remedies gaps in awareness and information, which may improve individuals’ postsecondary choices and degree attainment, or exploits the gaps using misleading or deceptive content, which may lead to costly enrollment mistakes and widen socioeconomic gaps in college completion. This project will investigate how college TV advertising affects enrollment at less-selective postsecondary institutions. The researchers will use several large datasets and state-of-the-art methods to estimate the effects of college advertising on individuals’ enrollment choices, degree completion, and earnings. The questions studied and knowledge generated in this project are relevant to issues of college access and equity, as groups historically excluded from U.S. higher education are more likely to be targeted and influenced by college advertisements. The findings from this research will provide empirical evidence to inform policy conversations about college advertising, pricing, and accountability. This project studies how college advertising impacts individuals’ tertiary enrollment decisions, degree completion, and post-college earnings. The first part of the project will examine how TV advertising affects demand for college. The PIs will estimate causal impacts of colleges’ own advertising, and that of competitors, on new undergraduate enrollments, and will analyze the patterns of advertising-induced enrollment substitution across different types of colleges. To identify the impacts of advertising on demand, the PIs will use a novel strategy that exploits exogenous variation in the realized impressions, or views, of TV ads. The PIs will implement the research design using a new dataset on college advertising, created by linking ad-level data to annual institution-level data on U.S. colleges. The second part of the project will study how college advertising impacts students’ educational and labor market outcomes. The PIs will combine advertising data with a longitudinal administrative database from one large state containing education and wage data of high school graduates. A border strategy will be used to identify and estimate the impact of advertising on college persistence, degree completion, and wages. Results from the first part of the project will show the extent to which colleges’ own TV advertising generates new enrollments and whether competitors’ ads reduce enrollments or generate positive enrollment spillovers. The results from the second part will reveal if individuals’ educational and earnings outcomes are improved or worsened by college ads, which will provide suggestive evidence of whether college advertising is informative, deceptive, or both. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.