An Investigation of U.S. Undergraduate Business School Rankings Using Data Envelopment Analysis With Value-Added Performance Indicators

Abstract

Bloomberg Businessweek ranks U.S. undergraduate business programs annually. These rankings provide a convenient overall measure of quality, which is important in today's environment of concern about higher education costs and employment after graduation. Data envelopment analysis (DEA) has advantages over previous regression approaches in characterizing value added. The authors use a DEA approach to estimate relative efficiencies based on starting salaries and recruiter surveys, identifying some schools as overachievers relative to their Bloomberg Businessweek rankings. In particular, DEA-based reranking highlights the ability of some public institutions facing high student–faculty ratios to turn out well-regarded graduates with high starting salaries.

Keywords:

• data envelopment analysis
• DEA
• efficiency
• performance
• rankings
• undergraduate business schools