Relationship Between Retention Rate and Graduation Rate of Online Universities

Economics and quantitative analysis
Name:
Institution:
9th February 2019

Purpose
This study aimed to investigate the relationship that exists between retention rate and the
graduation rate of the online universities. In order to test for this relationship, a set of data
comprising of 29 online universities is utilized. The data was obtained from the Online
Education Database which is an independent organization whose main mission is to have a well-
built database of all the accredited colleges and universities.
Background
Students persevering to finishing of their instructive objectives is a key check of student
achievement, and along these lines institutional achievement. Two most often referred to insights
in association with student achievement are the freshman-to-sophomore consistency standard, or
first-year yearly return rate, and the accomplice graduation rate. The freshman-to-sophomore
retention rate estimates the level of first-time, full-time students who are enrolled at the college
the following fall semester. The cohort graduation rate is characterized as the level of an entering
class that graduates within 3 years with an associate's degree, and within 4, 5, or 6 years with a
baccalaureate degree. Since the yearly return rate of students as they advance through a program
is straightforwardly identified with their degree/endorsement fruition, the idea of retention more
often than excludes year-by-year retention or perseverance rates also as graduation rates.
Together, these insights speak to student achievement. Economists are interested in the
association between graduation rate and retention rate as the students who graduate are likely to
influence the economic growth by improving the growth of economy unlike students who did not
graduate.

Method
This study seeks to find the relationship that exists between retention rate and graduation rate of
online universities and colleges. A regression analysis is utilized to establish the relationship that
exists between the two variables (retention rate and graduation rate).
The following regression model is to be fitted so as to predict the graduation rate based on the
retention rate;
Graduation rate=β0 + β1 ( Retention rate ) +ε
Where β0=Intercept ( constant ) coefficent , β1=Coefficient for retention rate ε =error term
Results
Descriptive analysis
In table 1 below we represent the descriptive statistics for the retention and graduation rates.
Some of the statistics presented include the mean, median, mode, standard deviation, skewness
among other statistics. As can be seen, the average retention rate is 57.41% (SD = 23.24) with
the median retention rate of 60% and a mode of 45%. The data is not that widely spread out as
can be seen from the standard deviation. For the graduation rate, the average was found to be
41.76% (SD = 9.87) with a median graduation rate of 39%.
Table 1: Descriptive (summary) statistics
Retention rate Graduation rate
N Valid 29 29
Missing 0 0
Mean 57.4138 41.7586