Geographical location and its impact on demand for online MBA programs

Abstract

We examine whether geography is related to online MBA program demand. Although online education seemingly mitigates geographical location as a barrier to attracting students, the location may still play a role in establishing students’ familiarity with schools and with creating competition among neighboring institutions. Using archival data, we find that schools in larger populations see more applications and more entrants to their online MBA programs, while more local competition suppresses demand for a school’s online MBA program unless the school is highly ranked. These results serve as a caution to administrators who view online education as a solution to constraints they face in attracting students locally.

Keywords:

• Competition
• education demand
• geographical location
• higher education
• online MBA

Acknowledgments

We would like to thank Faith Trimmer for her excellent research assistance.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author, EJN, upon reasonable request.

Notes

1 Distance, d, between two points A & B, is equal to: $$2r\mathrm{ }{\text{sin}}^{-1}\left(\sqrt{{\left(\text{sin}\left(\frac{\left({\mathit{lat}}_B-{\mathit{lat}}_A\right)}{2}\right)\right)}^2+2\text{cos}\left({\mathit{lat}}_A\right)\text{cos}\left({\mathit{lat}}_B\right){\left(\text{sin}\left(\frac{\left({\mathit{long}}_B-{\mathit{long}}_A\right)}{2}\right)\right)}^2}\right)$$ where r is the radius of the earth (3,958.8 miles) and latitude and longitude are measured in radians. This formula takes into account the curvature of the earth.

2 To check the validity of using a measure of a university’s population of graduate students for this study of online MBA programs, we compared the IPEDS data on state residency to data reported on Princeton Review. Princeton Review reports the in-state/out-of-state percentage breakdown for 85 of the 122 online MBA programs that it followed at the time of our data collection. Of those 85 programs, 78 appear in U.S. News’s 2020 Online MBA Ranking and 79 appear in their 2021 Ranking. The correlation between percentage of out-of-state students using the IPEDS data and the Princeton Review data is very high: r = .73 [t(78) = 9.50; p < .001] for schools in the 2020 Ranking and r = .80 [t(77) = 11.80; p < .001] for schools in the 2021 Ranking. Therefore, we feel comfortable using the university-level IPEDS data to calculate the weighted average of tuition when in-state and out-of-state tuition differ.

Additional information

Funding

This work was supported by a Summer Research Grant from the Heider College of Business, Creighton University, Omaha, Nebraska, USA.