Researchers at the University of Edinburgh say a university's perceived status has remained the overriding factor in student choice after analysing applicant and entry patterns between 1996 and 2010.
David Raffe and Linda Croxford, from Edinburgh's Centre for Educational Sociology, wanted to find out if efforts to introduce market-based competition between universities from 1998 - via the introduction of tuition fees - had affected student choice.
Advocates of tuition fees - which rose to ?3,000 in 2003 - claimed they would force universities to work harder to improve teaching to justify the charge, thereby driving up standards in universities and providing competition to older, more established institutions.
But the researchers found tuition fees and market-based competition have not changed the pecking order of institutions in England and Scotland.
Students continued to prioritise older universities which traditionally have had more prestige and history, especially those in the Russell Group, over newer institutions in their selection decisions.
Those students with better grades favoured Russell Group universities, followed by other pre-1992 universities, specialist institutions and university colleges, and then post-92 universities, the study shows.
The "hierarchy" of universities was also evident when analysing students' social class, with Russell Group institutions taking more students from professional families than other types of universities.
In 2010, 60 per cent of Russell Group entrants were from professional backgrounds, compared with 49 per cent among other pre-1992 universities and 39 per cent among post-1992 institutions. That compared with 72, 63 and 49 per cent respectively in 1996.
Russell Group universities also took largely the same amount of children from independent schools in 2010 as they did in 1996 (29 per cent compared with 32 per cent).
This lack of fluctuation in student choice over the 14-year period shows universities do not compete directly on issues such as teaching quality but on "factors beyond their control", such their history and their past reputation, the report says.
"There's not a lot of evidence that student choices are strongly influenced by what the advocates of market-based reforms would want them to be influenced by: issues such as perceived teaching quality or value for money," said Professor Raffe.
"So the new fee changes seem unlikely to lead to the radical shake-up of the system - with universities competing on quality and relevance to the student - that might have been expected.
"Instead, we simply have this hierarchy, which seems self-perpetuating in lots of ways."
The study, which was presented to the British Educational Research Association's annual conference at the University of Manchester on 5 September, adds: "The 2012 reforms may provide a stronger test of the power of true markets to challenge institutional hierarchies, although they too will fall short of a pure market model.
"Institutional hierarchies are resistant to change, and it is unrealistic to expect any but the most powerful of interventions to have a radical impact."