TY  - JOUR
AU  - Tracy,Joseph
AU  - Waldfogel,Joel
TI  - The Best Business Schools: A Market Based Approach
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4609
PY  - 1994
Y2  - January 1994
UR  - http://www.nber.org/papers/w4609
L1  - http://www.nber.org/papers/w4609.pdf
N1  - Author contact info:
Joseph Tracy
Executive Vice President
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-6344
E-Mail: joseph.tracy@ny.frb.org

Joel Waldfogel
Frederick R. Kappel Chair in Applied Economics
3-177 Carlson School of Management
University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Tel: 612/626-7128
E-Mail: jwaldfog@umn.edu
AB  - We present a new methodology for ranking business schools. Unlike previous rankings based on subjective survey responses (from CEOs, business school deans, recruiters, or graduates), our approach uses data derived from the labor market for new MBAs.  We adjust programs' salaries for the quality of entering students in an attempt to distinguish value added from the quality of incoming students.  We then rank programs according to value added.  Our results are rather surprising.  While four of our top five programs are also labelled as top programs in other rankings, ten of our top twenty are previously unranked.  By emphasizing program value added, our procedure identifies several programs that have been overlooked by other rankings since they do not recruit the very top students.  We explore the determinants of our value added and student quality measures and find that connections to the business community are positively related to value added, while academic research and high faculty salaries are more strongly associated with student quality.  We also find that tuition is better explained by our measure of value added than raw salary, suggesting that programs charge according to value added.
ER  -