What is the relationship between international university rankings and international tuition fees?
University rankings are clearly an important factor for international students and an essential element in the marketing mix of universities around the world.
After four years of reviewing the international tuition fees for all Australian universities, we have identified an insightful relationship between international rankings of Australian universities and the average international tuition fee for various programs.
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Using the QS World University Rankings 2018 and 2018 annual international undergraduate fees from all Australian Universities, we have analysed and plotted the relationship between international ranking and international tuition fees.
Chart 1 illustrates the clear relationship between rankings and international fees under the Australian context. It is not a surprise that there is a relationship but it is surprising how strong the correlation is.
Chart 1. Relationship between average international tuition fees and rankings (2018)
To measure how strong the relation is between these two variables, we took a step further and calculated the correlation coefficient. The correlation coefficient (a value between -1 and +1) tells you how strongly two variables are related to each other. When the correlation coefficient is close to 1, it means that the relationship between the two variables is really strong.
Our analysis highlights that there is a clear inverse correlation between fees and rankings. Basically, the higher the overall ranking a university has, the higher the annual undergraduate average international tuition fee.
In fact, the analysis shows that this correlation is getting stronger every year. From -0.839 in 2016 to -0.861 in 2017 and in 2018 it reached the value of -0.874 which is the highest so far. (Chart 2).
Chart 2. Inverse correlation between average international tuition fees and rankings (2018)
This relationship is clearly affecting the way universities are developing their pricing strategies and adjusting their marketing and recruitment strategies.
Interestingly, but once again not surprising, is to see very similar results for postgraduate international tuition fees. In this case, the correlation and trend remains consistent with a correlation coefficient of -0.870 in 2018.
Exploring this topic further to gain a better understanding, we have also included in the dataset, the fees and rankings of New Zealand universities. In this case, we identified that New Zealand universities don’t necessarily follow the relationship with international tuition fees and rankings as strongly as Australian universities.
When we include New Zealand data in the dataset, the correlation coefficient goes down to -0.732 and in fact the result for New Zealand universities only is -0.2866 (which basically means there is no relationship between fees and rankings for this group).
Chart 3. Inverse correlation Australia and New Zealand
Fee setting decisions are complex and complicated and the graph provides a very interesting view of where universities sit on the scale considering both rankings and annual tuition fees. However, we know that there are other elements such as location, graduate outcomes and the student experience, for example, that could also increase the value of the overall study experience at the university.
Chart 3. Inverse correlation Australia and New Zealand
So, this general trend may not apply to all universities but it’s clearly this element greatly influences the fee setting strategy at the Australian universities.
Studymove has released a complete report linking the relationship between international university rankings and international tuition fees using our analysis of 2018 international tuition fees.
This new detailed analysis takes a more comprehensive approach in the relationship of university ranking by subject area and specific international fees for eleven different fields of study. It’s an essential tool to support your institutional fee and marketing strategy.
How to purchase the complete report
The report is available to education providers, professional staff and academics who work within international education. Please contact us to obtain the relevant price and all the details.
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Telephone: +612 6100 4121
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Web: www.studymove.com
We welcome any feedback you have regarding this report. We are also happy to discuss your specific data needs and build a tailored report for your institution if required.
