How do the costs of living affect the inflow of international students?

A Statistical analysis from 300 EU Universities

What are the main channels to promote a country’s educational system overseas to attract a higher number of international students? What makes a study destination popular and how does a student pick a study destination? Several factors can be identified, such as the reputation of a country’s educational system reflected through university rankings, availability and variability of study programs, and of course, the costs of living in the destination country. The latest statistical analysis performed by The Class of 2020 aims to explore the latter; focusing on how costs of living affect a student’s decision in picking a specific study destination.[i]

To answer the research question, this study uses a statistical regression analysis consisting of 300 universities within 203 cities in the European region, employing variables which reflect the quality of education, the host city’s costs of living as well as its economic condition and demographic characteristics. Some fascinating observations from the dataset presented in the following tables, reveal some of the universities with the highest percentage of international students:

While the Central European University in Budapest hosts the highest percentage of international students (77%), the institution is also listed as one of the cheapest study destinations. This is an intriguing result since traditionally, some of the most expensive destinations (such as the UK and France) attract high numbers of internationals (LSE – 70%, EPF – 54%). It would be therefore interesting to investigate the rankings of the above universities as per their costs of living:

As we can observe from the above figures, universities in Turkey, Portugal, Greece, Hungary and Estonia offer some of the lowest costs of living, while universities in Switzerland, UK and Ireland are listed within the highest. Surprisingly, international students are attracted to both the cheapest, and the most expensive destinations. The statistical analysis will therefore reveal the true effects of costs of living on the inflow of international students. The following results summarize the main findings of the statistical analysis:

  • The number of international students is negatively affected by the host city’s costs of living (excluding the rent): A marginal euro spent per month on expenses other than rent, decreases the inflow of international students by 0.087%.
  • The number of international students is not affected by the rental rates of either renting a private studio or a shared apartment: The variable reflecting the effect of rental prices was regressed separately from other expenses; the findings show that it is insignificant to the inflow of international students.
  • Variables reflecting the quality of education have a stronger effect on the number of international students than variables reflecting the costs of living: Factors such as university rankings, international outlook scores and student to staff ratios are found to have a stronger effect than the costs of living. Therefore, most students give more emphasis in qualitative factors reflecting the reputation and quality of teaching, and less emphasis on the monthly expenses[ii].

Overall, the regression model can explain almost 66% of the variations in the decision making of international students concerning their study destination. In comparing the affordability of studying in the observed institutions, we can assess the best destinations for students with low affordability, in educational institutions located in Hungary and Portugal. On the other hand, students with high affordability would prefer destinations which entail high costs of living (and higher rankings reflecting the quality of education, such as UK, France and Switzerland.

[i] Sources: Times Higher Education University Rankings, NUMBEO costs of living estimator

[ii] Variables excluded from this research and thus act as limitations, include the economic status of students and tuition fees per university. The included variables consist of population per city and country, costs of living and rental rates per city, GDP per capita, student to staff ratios, international outlook scores, numbers of FTE students, percentage of internationals and world university rankings.

by Andreas Chrysanthou

Posted in News.