Analytics Stories

CHAPTER 25Should I Go to State U or Princeton?

In April of his senior year at Riverdale High, Archie Andrews has been accepted to both Princeton and State U. He knows Princeton is #1 in the 2020 U.S. News College rankings and State U is #57 (Penn State was #57). Being smart, Archie has found that 10 years after graduation, Princeton grads make a lot more money than State U grads. Archie's parents don't have a lot of money, so he is not sure what to do. The late Princeton economics professor Alan Krueger and mathematician Stacy Dale of Mathematica Policy Research conducted some brilliant research that might help Archie make an informed decision. (See /www.theatlantic.com/business/archive/2017/04/what-is-an-elite-college-really-worth/521577/ for a summary of the research, and you can find the research paper at www.nber.org/papers/w17159). Krueger and Dale found that after adjusting for the superior quality (as measured by SAT scores) of students at more selective schools, the more selective schools do not add significant value. In this chapter, we will analyze a fictitious data set that will help you understand the essence of the Dale-Krueger research. We will use Princeton to represent more selective schools and Penn State to represent less selective schools.

According to the 2020 U.S. News Best Colleges Report, the 25th–75th percentile range for the average of a Princeton student's SAT math and verbal scores is 720–785 and the 25th-75th percentile range for Penn State is 580–680. ...