The international market for MBA qualifications: The relationship between tuition fees and applications

This paper explores the relationship between tuition fees charged by MBA programmes and the number of applications to these programmes, using a panel dataset comprising universities from countries across the world. Using Three-Stage-Least-Squares methods for simultaneous equations, we find a two-way relationship between tuition fees and applications: higher application numbers encourage universities to charge higher fees in the future, but higher fees in turn curtail application numbers. We find evidence that higher GMAT scores of existing students increase applications, as do higher post MBA salaries. Meanwhile, university and programme professional accreditations do not impact on student application choices, nor do alumni ratings of programme quality. Published MBA programme rankings appear to have little impact on applications, and where an effect can be identified, it appears that a better ranking discourages applications. Only US News rankings have a significant effect on applicants to US MBA programmes.

► Simultaneous modeling of MBA tuition fees and applications choices determinants. ► New, large, institution level, panel dataset. ► More applications lead to higher fees, but higher fees discourage applications. ► Published programme rankings have a limited impact on applications. ► Accreditations have no significant effect on applications.