Admission Sync

Available rankings fail to tell a given student with a given skill set which schools are most likely to increase his market value. That’s the goal of the rankings created by Mike Shor an economist at Vanderbilt University’s b-school, highlighting that a change in methodology significantly alters the results.

Mike Shor took the top 50 MBA programs in the latest ranking by U.S. News & World Report (2009) and attempted to calculate what portion of actual salaries is above and beyond what grads would have earned with a degree from an “average” MBA program, based on GMAT scores and college grades. His goal was to remove the selection bias inherent in some rankings—the tendency for really smart people, who would have been high paid regardless of where (or if) they got a degree, to attend the very best schools.

In the table below:

Adjusted salary (in thousands of dollars) reflects both the starting salary of those employed within three months of graduation, and a downward adjustment for those who are not. All students not employed within three months of graduation are (pessimistically) assumed to have a salary equal to 80% of the average salary of employed students at their institution. This biases results against schools with low placement rates. If S=average salary and e=percentage employed, then adjusted salary = Se+.8S(1-e)

Market value denotes the difference between a school’s adjusted salary and what that school’s students would expect to earn (given their qualifications at admission) at an average business school (for a loose definition of an “average” school in this context, see no. 29). A student with a high GMAT score and an exceptional undergraduate GPA is likely to receive higher offers than one with lower scores regardless of the MBA program he attends (not because of the undergrad GPA, but because of what it reveals about the person). Market value indicates how much a school improves on this given its actual student population.

Adopted from

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