We recently published our list of the 25 Most Underrated Colleges in America.
In order to determine which schools were underrated (and overrated), we considered two factors: reputation and salary. We figured that schools with a bad reputation but a high salary would be underrated, and schools with a great reputation but terrible salary would be overrated.
We used the following rankings to compile this list:
- The U.S. News & World Report rankings. We combined the mutually exclusive sets of Best Universities and Best Liberal Arts Colleges.
- The PayScale College Salary Report rankings
We determined that each school — there were several hundred in the analysis — had two variables: their college ranking (US News) and their salary ranking (PayScale). Schools with a low college ranking and high salary were “underrated” and schools with a high college ranking and low salary ranking were “overrated.”
We plotted the two variables and ran a simple linear regression of the data using the regression line formula:
Salary Rank = 2.75 * College Rank
This means that a school that is ranked 100th on the college rankings is expected to be ranked at 275th on the salary rankings.
We looked for schools where there was a large disparity between their college rank and their salary rank — the so-called most “overrated” and “underrated” colleges.
As an example, here are four colleges from the set, and how we interpreted their plots:
In order to quantify our interpretation, we looked at each college’s residual, or the distance between their expected salary rank in the regression and their actual salary rank in the set.
Colleges with a residual length of around zero are appropriately ranked. Their salary ranking performance is in the ballpark of what you would expect it to be.
Colleges with large negative residuals are schools that are underrated. They’re highly ranked on salary, but aren’t given due credit on the U.S. News ranking.
Colleges with large positive residuals are schools that are overrated. They’re highly ranked on the U.S. News college ranking but have low salaries.
We found that most of the underrated schools (the set of schools with large negative residuals) were engineering and technology schools with relatively low U.S. News rankings but outstanding salary performance. And most of the overrated schools (schools with large positive residuals) were small liberal arts colleges and art schools, with low expected salaries but high rankings.
Here’s a crude visual illustration of what we were able to compute:
On the main slideshow, the U.S. News College or University ranking has been doubled to make it clear to the reader the disparity between the scores, and to accommodate the fact that we combine the sets.
This doubling is called “the reputation score” and does not in fact work its way into our analysis, it is only their for the purposes of demonstration.
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