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The Best Business Schools: A Market-Based Approach


  • Tracy, Joseph
  • Waldfogel, Joel


This article introduces a market-based methodology for evaluating the performance of MBA programs. The authors seek to distinguish the quality of a program from the quality of its students. They judge a program's performance by its value added, measured by the graduates' salaries, after accounting for student characteristics and job attributes. While four of the authors' top five programs have been highly ranked elsewhere, ten of their top twenty programs are unranked elsewhere. The authors explore the determinants of value added and find that programs with high faculty salaries and those relying heavily on the case method have significantly higher value added. Copyright 1997 by University of Chicago Press.

Suggested Citation

  • Tracy, Joseph & Waldfogel, Joel, 1997. "The Best Business Schools: A Market-Based Approach," The Journal of Business, University of Chicago Press, vol. 70(1), pages 1-31, January.
  • Handle: RePEc:ucp:jnlbus:v:70:y:1997:i:1:p:1-31

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    References listed on IDEAS

    1. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August.
    2. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
    3. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    4. Ronald G. Ehrenberg, 1988. "An Economic Analysis of the Market for Law School Students," NBER Working Papers 2602, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Yongil Jeon & Stephen M. Miller & Subhash C. Ray, 2007. "MBA Program Reputation And Quantitative Rankings: New Information for Students, Employers, And Program Administrators," Working papers 2007-44, University of Connecticut, Department of Economics.
    2. Grove, Wayne A. & Hussey, Andrew, 2014. "Returns to MBA quality: Pecuniary and non-pecuniary returns to peers, faculty, and institution quality," Labour Economics, Elsevier, vol. 26(C), pages 43-54.
    3. Benito Arruñada & Xosé H. Vázquez, 2009. "Behavioral assumptions and management ability," Economics Working Papers 1157, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2010.
    4. Ray, Subhash C. & Jeon, Yongil, 2008. "Reputation and efficiency: A non-parametric assessment of America's top-rated MBA programs," European Journal of Operational Research, Elsevier, vol. 189(1), pages 245-268, August.
    5. Robert E. Martin, 2011. "The College Cost Disease," Books, Edward Elgar Publishing, number 14179.
    6. repec:ner:leuven:urn:hdl:123456789/327130 is not listed on IDEAS
    7. Besancenot, Damien & Faria, João Ricardo, 2010. "Good research and bad teaching? A business school tale," Research in Economics, Elsevier, vol. 64(2), pages 67-72, June.
    8. Yongil Jeon & Stephen M. Miller & Subhash C. Ray, 2003. "MBA Program Reputation: Objective Rankings for Students, Employers and Program Administrators," Working papers 2003-28, University of Connecticut, Department of Economics.
    9. Ravallion, Martin, 2000. "What can we learn about country performance from conditional comparisons across countries?," Policy Research Working Paper Series 2342, The World Bank.
    10. Caroline Elliott & Kwok Tong Soo, 2012. "The Returns to an MBA Degree: The Impact of Programme Attributes," Working Papers 24284646, Lancaster University Management School, Economics Department.
    11. Dahlia K. Remler & Elda Pema, 2009. "Why do Institutions of Higher Education Reward Research While Selling Education?," NBER Working Papers 14974, National Bureau of Economic Research, Inc.
    12. repec:spr:manint:v:52:y:2012:i:3:d:10.1007_s11575-011-0116-x is not listed on IDEAS
    13. Gicheva, Dora, 2012. "Worker mobility, employer-provided general training, and the choice of graduate education," Labour Economics, Elsevier, vol. 19(2), pages 232-240.
    14. Paul Oyer, 2006. "The Making of an Investment Banker: Macroeconomic Shocks, Career Choice, and Lifetime Income," NBER Working Papers 12059, National Bureau of Economic Research, Inc.
    15. Anne E Winkler & Sharon G Levin & Paula E Stephan & Wolfgang Gl&aauml;nzel, 2014. "Publishing Trends in Economics across Colleges and Universities, 1991–2007," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 40(4), pages 560-582, September.
    16. Steven M. Shugan, 2003. "Editorial: Journal Rankings: Save the Outlets for Your Research," Marketing Science, INFORMS, vol. 22(4), pages 437-441.
    17. Qi Kong & Michael R. Veall, 2005. "Does the Maclean's Ranking Matter?," Canadian Public Policy, University of Toronto Press, vol. 31(3), pages 231-242, September.

    More about this item

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials


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