Australian International School of Dhaka

IB Maths Studies Internal Assessment

Research paper
on

“A Study of the Relationship between

University Endowments and their
Ranking”

Table of Contents
Introduction……………………………………………………………………………………..3
Statement of the Task……………………………………………………………….…3

1 | Page
 Plan of Investigation……………………………………………………………………4
Mathematical Investigation…………………………………………………….5-14
Collected Data……………………………………………………………………..5-8
Calculation and Processing…………………………………………..8-14
Limitation………………………………………………………………………………………..15-16
Conclusion………………………………………………………………………………………16
Bibliography…………………………………………………………………………………..17

2 | Page
 Introduction
What does it take to be the one of the best universities in the world? Some
Universities are higher than others, and the best institutions are also the
wealthiest. These institutes do extensive research. Research efforts
account for 30% of the score obtained, according to Times higher
Education (THE), the most trusted ranking systems. There are 13
performance indicators in 5 assessment arears mentioned below:
- Teaching: Learning Environment (30%)
- Research: Volume, Income and Reputation (30%)
- Citations: Research Influence (30%)
- Industry Income: Innovation (2.5%)
- International Outlook: Staff, Students and Research (7.5%)
A significant 30 percent is determined by how much a university’s
research is used, or how much it inspires other studies.

Statement of the Task

The investigation’s main goal is to see if there is a link between the
amount of endowment a university in the United States receives each year
and its global ranking. The sort of data that will be collected includes each
university’s endowment in US dollars (USD $) for the last five years, as well
as its global ranking throughout that time period.
The ranking information obtained from Times Higher Education (THE)
while the endowment information was obtained from NACUBO. According
to the hypotheses, the goal is to identify a relationship between ranking
and university.

3 | Page
 Plan of Investigation
I am looking into the link between a university’s endowment and its global
ranking. I gathered ranking data from a well-known ranking system, The
Times Higher Education (THE), in the form of the rankings per year from
2016 to 2020. The attained information was statistically analyzed using
various descriptive and inferential techniques. To demonstrate
dependency, the least regression line, Pearson’s Correlation Coefficient,
and the Chi-Square Test were Calculated in addition to the mean.
However, due to the data found in the chi-square Test, the Yates’s
Continuity correlation have to be used as an additional validation test.

Question for Research: How does the endowment of a university impact

its worldwide ranking?

Alternate Hypothesis ( H 1): As an American university’s endowment grows

in USD dollars, so does its global ranking. As a result, the endowment and
ranking of a university are both dependent variables.

Null Hypothesis ( H 0): The monetary value of an American university’s

endowment has little impact on its global ranking. As a result, the
endowment and ranking of a university are independent.

4 | Page
 Mathematical Investigation

Collected Data:
Table 1- Data of Ranking (from THE) and Endowment in USD
from 2016 to 2020

Institute Ranking Endowment (Billions in Dollars)

Year 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Harvard University 1 5 1 7 10 35.88 35.56 31.69 36.88 36.5
Stanford University 3 2 3 2 2 22.7 21.43 30.33 29.88 30.2
Massachusetts Insititute of
Technology 2 1 2 1 1 14.33 15.41 13.9 16.02 16.8
University of California,
Berkeley 6 6 6 5 6 2.09 2.29 3.3 3.8 4.2
Princeton University 7 8 7 8 7 22.2 21.5 22.65 24.7 24.5
California Institute of
Technology 10 7 11 10 10 2.09 2.5 2.89 3.39 3.7
Columbia University 9 10 12 11 9 10.22 10.2 11.5 11.43 10.2
University of Chicago 11 11 9 9 13 8.88 9.2 7.22 9.66 9.44
Yale University 8 16 8 6 11 24.8 23.05 25.55 26.77 26.8
University of California, Los
Angeles 13 12 9 13 12 2 2.8 3.09 3.6 3.88
Cornell University 17 15 18 16 17 6.22 6.7 7.22 7.3 7.8
University of California, San
Diego 35 30 31 30 30 9.22 9.33 10.22 10.03 10.55
University of Washington 29 28 28 29 27 3.3 3.38 4.43 4.88 4.94
University of Pennsylvania 16 16 16 15 16 10.11 10.99 11.02 11.05 11.79
The Johns Hopkins University 22 20 21 20 21 3.36 4.44 4.9 5.09 6.02
University of Michigan 14 13 15 14 15 10.9 11.55 12.8 13.45 14.6
University of Wiskonsin-
Madison 35 34 33 31 32 4.4 4.67 4.75 5.59 7.7
New York University 25 24 26 26 24 4.02 4.08 6.09 7.09 7.67
North-Western University 30 36 37 38 39 12.22 12.88 12.99 13.8 14.08
University of Illinois 30 31 32 32 33 5.08 5.77 6.55 7.9 8.2
University of Minnesota 49 50 51 50 50 6.9 6.2 7.02 7.06 7.55
Washington University in St.
Louis 61 70 81 61 63 7.22 8.99 9.02 9.99 10.22
Rockefeller University 67 69 68 68 69 3.33 3.8 4.4 5.9 6.6
University of Colorado at
Boulder 70 80 91 70 65 2.2 2.28 2.9 3.3 4.07
University of North Carolina at
Chapel Hill 51 53 52 52 53 3.82 3.89 4.4 4.08 4.9

5 | Page
Table 02 Mean ranking and endowment
Institution Mean Mean
Ranking Budget
USD$
Harvard University 4.8 35.2725
Stanford University 2.4 28.7975
Massachusetts Institute 1.4 15.022
of Technology
University of California, 5.8 5.884
Berkeley
Princeton University 7.4 23.562
California Institute of 9.6 2.914
Technology
Columbia University 10.2 10.71
University of Chicago 10.6 8.88
Yale University 9.8 25.394
University of California, 11.8 3.074
Los Angeles
Cornell University 16.6 7.048
University of California, 31.2 9.87
San Diego
University of Washington 28.2 4.186
University of 15.8 10.992
Pennsylvania
The Johns Hopkins 20.8 4.762
University
University of Michigan 14.2 12.66
University of Wiskonsin- 33 5.422
Madison

6 | Page
 New York University 25 5.79
North-Western University 36 13.194
University of Illinois 31.6 6.7
University of Minnesota 50 6.946
Washington University in 67.2 9.088
St. Louis
Rockefeller University 68.2 4.806
University of Colorado at 75.2 2.95
Boulder
University of North 52.03 4.40
Carolina Chapel Hill

Endowment of Ranking
University
$0-2 billion 22
$2-4 billion 26
$4-6 billion 24
$6-8 billion 17
$9-10 billion 20
$10-15 billion 3
$15-20 billion 7
$20 billion + 2

Graph 1 – Graph to portray Correlation between University

Endowment and Ranking

7 | Page
 Graph to show correlation between University
Endowment and Ranking
30

25

20
Ranking (THE)

15

10

0
0 1 2 3 4 5 6 7 8 9 10
Endowment per year in US Dollars (USD $)

This Graph demonstrates a weak negative Correlation between

ranking and endowment, defines that as endowment in USD
increases, the ranking gets closer to 1 which refutes the null
hypothesis and gives support to the alternate.

Calculations and Processing

Calculation of the Least Squares Regression
The Least Squares Regression is a Statistical tool used to
determine a line of best fit by minimizing the sum of squares
created by a mathematical function.
S xy
formula: y− y=
Sx2
(x−x)

❑
∑ xy−x y
Where
S xy = ❑
❑

And S x is S x =√❑

Table 4 – Least Squares Regression Values

8 | Page
 x Y xy x2

1.00 19.00 19.00 1.00

3.00 26.16 78.48 9.00
5.00 22.00 110.00 25.00
7.00 15.12 105.84 49.00
9.00 22.20 199.80 81.00
13.00 3.40 44.20 169.00
18.00 6.67 120.00 324.00
❑ ❑ ❑ ❑
∑ ¿56.00
❑
∑ 114.55
❑
∑ 677.32
❑
∑
❑
658.00

x=8 y=16 x y=131 x 2=94

Now,
❑
∑ xy−x y
S xy = ❑
❑
677.32
S xy = −131
7
S xy =−34.2

Again,
S x =√❑

S x =√❑

S x =5

So, the regression line is-

S xy
y− y= (x−x)
Sx2

−34.2
y−16= ( x−8)
5

9 | Page
y=−1.138349 x +122.52

Calculation of the Pearson Correlation Coefficient

The correlation Coefficient is a metric for determining how
strong a relationship exists between two variables. Pearson’s
Correlation (sometimes known as Pearson’s R) is a linear
regression correlation coefficient. Endowment and University
Ranking are the variables in this computation.
formula:
S xy
r=
Sx S y

Where S x =√❑

And, S y = √❑
❑
∑ xy−x y
And S xy is the Covariance ❑
❑

Table 5- Pearson’s Correlation Coefficient Values

X y ( x−x ) ( y− y) ( x−x )( y− y ) ( x−x )2 ( y− y)2
1.0 19.00 -7.00 2.64 -18.00 49.00 6.95
3.00 26.16 -4.00 9.80 -49.00 25.00 95.97
5.00 22.00 -4.00 5.64 -17.00 9.00 31.77

10 | Page
 7.00 15.12 -1.00 -1.24 1.00 1.00 1.55
9.00 22.20 1.00 5.84 6.00 1.00 34.06
13.00 3.40 5.00 -12.96 -65.00 25.00 168.06
18.00 6.67 10.00 -9.70 -97.00 100.00 94.03
❑ ❑ ❑ ❑ ❑ ❑ ❑
∑ ¿56.00 ∑ 114.55 ∑ ¿0 ∑ ¿ 0.00 ∑ ¿−239.00 ∑ 210.00 ∑ 432.38
❑ ❑ ❑ ❑ ❑ ❑ ❑

x=8.00 y=16.00 x y=−34

Now,
S x =√❑

S x =√❑

S x =30

And
S y = √❑

S y = √❑

S y =61.75

❑
∑ xy−x y
S xy = ❑
❑
6415
S xy = −(−34)
7
S xy ≈ 950

S xy
r=
Sx S y
950
r=
(30)(61.75)

11 | Page
r =0.79332

r 2=0.6293613

From the Calculation, r 2=0.62293613 defines that the strength of

the relationship between the variables is moderately strong. As
per Standard table of Coefficient of determination, this seems a
moderately strong correlation. This value refutes the null
hypothesis to some degree.

Calculation of the Chi-Square Test:

The equation of Chi-Square test is-
2 ( f 0−f e )2
❑
x =∑
❑ fe

Df = (rows - 1) (columns – 1)
= (2 – 1) (2 – 1)
=1

Table 6 -Observed values

Endowment Score
(1 – 30) (31 – 40) Total
$0 – 2 Billion 6 6 12
$4-20 Billion 9 3 12

12 | Page
 Total 15 9 24

Table 7 – Calculating the expected values

Endowment Score
(1 – 30) (31 – 40) Total
$0 – 2 Billion (6+9)*(6+6)/24 (6+3)(6+6)/24 6+6
$4-20 Billion (9+6)*(9+3)/24 (3+9)*(3+6)/24 9+3
Total 9+6 3+6 24

Table 8 Expected values

Endowment Score
(1 – 30) (31 – 40) Total
$0 – 2 Billion 7.5 4.5 12
$4-20 Billion 7.5 4.5 12
Total 15 9 24

Table 9 X calc
Endowment f0 fe f 0−f e ( f 0−f e )2 ( f 0−f e )2 ÷ f e

$0-2 1-20 6 7.5 -1.5 2.25 0.3

21-40 6 4.5 1.5 2.25 0.3
$4-20 1-20 9 7.5 1.5 2.25 0.3
21-40 3 4.5 -1.5 2.25 0.5

2
❑
( f 0−f e )2
x =∑
❑ fe

13 | Page
 x 2=1.6

So, the x 2Critical value at 5% significance with the degree of

freedom is 1. Because x 2is greater than the critical value, 1.60<3.84 ,
the alternative hypothesis rejected and university ranking is
assumed independent from the endowment. Similarly, the p
value is greater than the standard value, 0.21>0.05 .

Therefore, the degree of freedom is just 1. That is why a Yates’

Continuity correction must be calculated.

Yates’ Continuity correction:

This is used for certain situation where testing for independence
in a contingency table, for example when the degree of
freedom is equal to 1, such as in this case.

Table 10- Yates’ Continuity correction

Endowmen | f 0−f e | ¿ f 0−f e ∨−0.5 (¿ f 0−f e ∨−0.5)2 (¿ f 0−f e ∨−0.5)2 ÷ f e
t
$0-2 1.5 1 1 0.13
1.5 1 1 0.22
$4-20 1.5 1 1 0.13
1.5 1 1 0.22
Total 0.71

Yates’ Continuity Correction = 0.71

14 | Page
 Limitations
Elements in the study may have influenced the mathematical
determination. The Calculated values for the relation identified
between a university’s Rankings and its endowment must take
into account the format’s restrictions.
The endowment is divided into categories due of disagreement
between them. For example, the third endowment category
ranges from $4 billion to $6 billion (USD), while the following
endowment category is from $2 billion to $4 billion (USD). This
kind of inconsistency may have thrown the findings off.

Another issue is that using the mean as measurement of central

tendency may not correctly reflect dispersion. Any unusual
results can entirely skew the results.

Moreover, the Chi-Squared Test’s anticipated values table did

not have a number greater than 9, reducing the test’s validity
significantly. In addition, the chi-squared is affected by sample
size. The findings would be more reliable if there were more
values. The number of values used in this study may not be
enough to indicate a link between endowment and ranking.

Because this research relies solely on the ranking of one ranking

system, it is significantly biased, as it excludes other
organizations’ ways of determining rank. Similarly, only global
ranking rankings were employed and if national values had
been included, then different result might have been
discovered.

15 | Page
Other factors may be at play, such as outliers for specific year,
university ages, the number of alumni and benefactors, and so
on, as explanation for a specific year’s results.
And at last, ecological relevance must be considered. These
rankings are correct for the theory, but they cannot be applied
to other countries across the world, just the United States of
America. As a result, the findings of the study may be deemed
insufficient since they cannot be extended to broader research.

Conclusion
Despite the fact that this study and its methodology have
numerous limitations, the Pearson and Least Squares
Regression results favor the alternate hypothesis and appear to
refute the null hypothesis. As a result, the null hypothesis was
not rejected by the Chi-squared Test, which yielded a score of
1.6.

This indicates independence rather than a connection between

the two variables. The Yates’ Continuity Correction, which
validates the Chi-Square. On the other hand, also failed to reject
the null hypothesis with a value of less than 3.84. There is no
obvious outcome as a result of these studies, and it is still
unclear whether endowment is a separate variable from
ranking and whether they are both independent.

Bibliography
1. Times Higher Education (THE). 2021. World University Rankings.
<https://www.timeshighereducation.com/world-university-
rankings/2020/world-
ranking#!/page/0/length/25/sort_by/rank/sort_order/asc/cols/stats>

16 | Page
 2. <https://www.nacubo.org/>
3. <https://www.nacubo.org/Research/2020/Historic-Endowment-
Study-Data>
4. Statistics.laerd.com. 2021. Pearson Product-Moment Correlation -
When you should run this test, the range of values the coefficient
can take and how to measure strength of association
<https://statistics.laerd.com/statistical-guides/pearson-correlation-
coefficient-statistical-guide.php>
5. Www2.lv.psu.edu. 2021. CHI-SQUARE TEST.
<http://www2.lv.psu.edu/jxm57/irp/chisquar.html>
6. Clintools.com. 2021. Odds Ratio Generator.
<http://www.clintools.com/products/org/odds_ratio_generator.html>
7. Ccnmtl.columbia.edu. 2021. QMSS e-Lessons | About the Chi-Square
Test.
<https://ccnmtl.columbia.edu/projects/qmss/the_chisquare_test/abo
ut_the_chisquare_test.html>

17 | Page