About this Indicator
A major shortcoming of raw completion rates is that they do not necessarily gauge the performance of particular postsecondary institutions but rather constitute an outcome of the totality of performances across the PK-16 educational system as well as the broader system of public policies that shape postsecondary opportunities. In order to better assess the value that institutions add to completion outcomes, an effectiveness indicator is defined as the difference between the actual graduation rate and the rate that would be expected given the institution’s structural, demographic, finance and contextual characteristics. Scores that approximate or exceed zero indicate that, on average, institutional conditions are conducive to timely completion.
In the case of four-year institutions, overall institutional effectiveness scores were computed as the average of scores based on the four- and six-year graduation rate models. The graduation rate is based on the percentage of full-time, first-time bachelor’s degree-seeking students who graduate within four or six years (2004, 2005, and 2006 cohorts). Overall effectiveness for two-year colleges was computed as the average of scores based on models for graduation within 150% of program time and graduation or transfer within 150% of program time. In addition, the average performance scores of public institutions weighted by FTE undergraduate enrollment were calculated for each state. A state’s institutional effectiveness score reflects the average standardized difference between actual and predicted completion rates at public institutions (rates predicted from institutional and state attributes).
MHEC. The Effectiveness and Efficiency of Postsecondary Institutions in the United States. Minneapolis, MN: Midwestern Higher Education Compact. Retrieved from https://www.mhec.org/sites/default/files/resources/201507EENational.pdf
 Horn, A. S., & Lee, G. (2016). The reliability and validity of using regression residuals to measure institutional effectiveness in promoting degree completion. Research in Higher Education, 57(4), 469-496. Horn, A. S., Horner, O. G., & Lee, G. (2019). Measuring the effectiveness of two-year colleges: a comparison of raw and value-added performance indicators. Studies in Higher Education, 44(1), 151-169.