Everyone agrees that large research schools are bad at teaching and that at least some small schools are better.
"Everyone agrees" huh? Do you have any evidence for that? As far as I can tell correlation between prestige, research quality, and teaching quality is highly positive in Polish universities' computer science (that's the only kind I know closely, for everything else I would just guess their quality from their prestige).
I would say there is a general positive correlation between teaching quality, research quality, and prestige, with some exceptions for smaller schools that specifically focus on quality undergraduate education (like Princeton). But don't be fooled by a college saying that its classes are better because its smaller- you actually need to attend both classes and compare. People can be very proud that their school has 'great' lectures in what I would consider high school level biology, simply because their professor is 'fun.'
Bryan Caplan writes:
Robin Hanson offers an explanation:
I wonder, what does this look like in the cross section? In other words, relative to other academic disciplines, which have the strongest tendency to celebrate difficult work but ignore sound-yet-unimpressive work? My hunch is that economics, along with most other social sciences, would be the worst offenders, while the fields closer to engineering will be on the other end of the spectrum. Engineers should be more concerned with truth since whatever they build has to, you know, work. What say you? More importantly, anyone have any evidence?