The other day I was having a conversation with a colleague about how much size matters to US News. That is, how closely correlated are US News rankings of national liberal arts schools with the size of their endowments? Since both the rankings and the size of endowments are available on the US News website, I decided to take a look. (Note that I don’t actually have any software for statistical analysis at home, so everything that follows will be very basic.)
The first thing I did was create a list of the top 99 schools (there were several schools at #100, so I decided to go with 99 instead of 104 or whatever it would have been) with their rankings and the size of their endowments and then order the list by endowment size and re-rank the schools in order to determine the difference between US News rank and endowment rank. On average, the US News rankings differed from the endowment rankings by just -.48, meaning that the average school is ranked about a half a position lower than its endowment would suggest.
Considering that raw endowment amounts may not be as important as endowment per student, I did the same analysis again but divided the endowment by the total number of students. The result was the same: -.48. In both cases, though, the standard deviation was large. For raw endowment, the standard deviation was 18.66, while for enrollment-adjusted endowment it was 20.99.
I also looked at the schools with the best and worst rankings relative to their endowments. The winners were the US Air Force Academy (ranked 65 spots above the location that its 90th-ranked endowment would suggest) and the US Military Academy (46 spots above its 63rd-ranked endowment). The losers were Berea College (65 spots below its 11th-ranked endowment) and Agnes Scott College (37 spots below its 52nd-ranked endowment).
Finally, I took a look at the correlation coefficients. Pearson’s r for the raw endowment was .78, while for enrollment-adjusted endowment it was .72. In both cases, there is a strong correlation between endowment and US News rankings. This isn’t particularly surprising, given that a large endowment makes a school more able to do the things that US News values while drawing the types of students that US News values. It does, however, point out that, in many cases, US News rankings don’t provide much information beyond what we could ascertain by glancing at the endowments of two schools.
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