August has been a summer of circuses. We first had the circus of the Olympics. Then we have the circus of the Democratic National Convention, a glorified extended commercial that the media pretends actually matters. But at least those two happen once every four years. The higher-education community has to endure annual unveilings of the controversial U.S. News & World Report rankings of undergraduate universities. Who went down? Who went up? Which schools “goosed” the rankings? Like it or not, admissions offices nationwide must hang on every decimal point, as they know an improved ranking can drive thousands more applicants to their school. Just witness the boon to Penn’s acceptance rate after the school cracked the top five.

It is indeed a shame that these rankings matter. Besides the obvious conflict-of-interest (the conflicting priorities of higher education and a magazine trying to sell as many issues as possible), the U.S. News & World Report methodology is grossly flawed. Instead of measuring outcomes, the report focuses on incoming statistics — SAT ranges, incoming students in the top 10 percent of their high school class and so on. “Freshman retention” weighs heavily, so schools that have difficult first-year programs like Caltech and MIT suffer.

The magazine also uses “alumni giving rate” as part of its methodology; it is unclear how an alum from the Class of 1980 writing a $100 check has anything to do with the quality of the school in 2008. So although Stanford tends to raise twice as much money annually as Princeton, they trail in that category due to the higher number of alumni at Princeton who donate. Indeed, the rankings have not been kind to the Farm. Stanford has trailed behind Harvard, Yale and Princeton for the past decade — mostly because of the lower admissions standards for athletes, in my opinion.

Rankings have become quite an industry. The undergraduate rankings issue is U.S. News’s top-selling. Forbes, Newsweek and other publications have created their own rankings to capitalize on the rankings bonanza as undergraduate admissions become ever-more competitive. Forbes’ attempt was particularly weak; a full 25 percent of the methodology was based on ratemyprofessors.com. The use of that site creates debilitating selection bias issues that should — although they won’t — de-legitimize Forbes’ rankings entirely. I do not know a single person who has ever used that Web site. U.S. News, for its part, does not make its “Common Data Set,” which all universities submit, publicly available, hindering transparency.

Most critics of the U.S. News rankings argue that it is impossible to rank schools at all. I disagree. A few years ago, the Wall Street Journal did a study of professional school placement. They ranked undergraduate institutions by how many students (as a percentage of their class) got into top professional schools. While professional-school placement is only one measure of educational outcome, it is decidedly an important one and shows which universities professional schools prefer. But very little data of that sort is publicly available. More studies that measure placement and outcome would rank schools far more accurately than the dreamt-up, always-changing methodology of U.S. News.

“Cross-admits” remain the holy grail of undergraduate admissions statistics, and the data most useful to those attempting to rank schools. For the past several years, Princeton was top-ranked despite academic studies showing that students admitted to both Harvard and Princeton would choose Harvard 70 percent of the time. Sorting students by where they actually choose to go to school, rather than where some profit-seeking magazine thinks they should go is the most meaningful way to rank colleges. Importantly, it prevents colleges from manipulating statistics to move up the rankings. Any incentives that colleges can use to increase their cross-admit yield, like better financial-aid offers and merit-scholarship programs, will only benefit students. Instead, the U.S. News rankings set up a perverse system where schools like Washington University in St. Louis will waitlist thousands of good students in order to lower their acceptance rate.

It has reached a point where the rankings have a pernicious effect on the behavior of schools themselves. Instead of moving to a more transparent, nonbinding early action program, or even better, eliminating early admissions entirely, the rankings incentivize schools to hold onto their early decision programs and use the waitlist as much as possible. There is even speculation that Stanford’s proposal to increase its class size by 200 students is motivated by Princeton’s recent class size increase, as well as Yale and Chicago’s plans to do so.

Competition and transparency are good for college admissions. We are, unfortunately, working under a system that does not allow the efficiencies of the market to work. A lack of access to information that really matters, not “alumni giving rate” and “faculty resources” hinders the ability to rank colleges effectively and most importantly, for high-school students to make the right decision about their educational future.

Stuart Baimel thinks that the preseason college football rankings are as distorted as the U.S. News rankings. Oklahoma and Clemson are ranked five places too high every year. Send him your pick for Most Overrated to sbaimel "at" stanford.edu.