Alumni donations are an important source of revenue for colleges and universities. If.....

Alumni donations are an important source of revenue for colleges and universities. If
administrators could determine the factors that could lead to increases in the percentage of
alumni who make a donation, they might be able to implement policies that could lead to
increased revenues. Research shows that students who are more satisfied with their contact
with teachers are more likely to graduate. As a result, one might suspect that smaller class sizes
and lower student/faculty ratios might lead to a higher percentage of satisfied graduates, which
in turn might lead to increases in the percentage of alumni who make a donation. The following
partial table shows a portion of the data for 48 US universities.

The Graduation Rate column is the percentage of students who initially enrolled at the
university and graduated. The % of Classes Under 20 column shows the percentages of classes
offered with fewer than 20 students. The Student/Faculty Ratio column is the number of
students enrolled divided by the total number of faculty. Finally, the Alumni Giving Rate column
is the percentage of alumni who made a donation to the university.
Managerial Report
1. Use methods of descriptive statistics to summarize the data.
2. Develop an estimated simple linear regression model that can be used to predict the
alumni giving rate, given the graduation rate. Discuss your findings.
3. Develop an estimated multiple linear regression model that could be used to predict the
alumni giving rate using the Graduation Rate, % of Classes Under 20, and
Student/Faculty Ratio as independent variables. Discuss your findings.
4. Based on the results in parts 2 and 3, do you believe another regression model may be
more appropriate? Estimate this model, and discuss your results.
5. What conclusions and recommendations can you derive from your analysis? What
universities are achieving a substantially higher alumni giving rate than would be
expected, given their Graduation Rate, % of Classes Under 20, and Student/Faculty
Ratio? What universities are achieving a substantially lower alumni giving rate than
would be expected, given their Graduation Rate, % of Classes Under 20, and
Student/Faculty Ratio? What other independent variables could be included in the
model?
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