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RETURNS TO FIELD OF STUDY VERSUS SCHOOL QUALITY: MBA SELECTION ON OBSERVED AND UNOBSERVED HETEROGENEITY

Authors

  • WAYNE A. GROVE,

    1. Grove: Professor, Economics Department, Le Moyne College, Syracuse, NY 13214. Phone 315 445 4262, Fax:315 445 4540, E-mail grovewa@lemoyne.edu
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  • ANDREW HUSSEY

    1. Hussey: Assistant Professor, Department of Economics, Fogelman College of Business & Economics, University of Memphis, Memphis, TN 38152. Phone 901 678 1487, Fax 901 678 2685, E-mail ajhussey@memphis.edu
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    • We thank Mark Montgomery, John Robst, Vincent Hevern, and participants at the George Mason University and Le Moyne College seminars.


Abstract

While a substantial literature has established returns to college major and to school quality, we offer the first such estimates for Master's of Business Administration (MBAs). To control for their nonrandom selection of fields, we estimate the returns to MBA concentrations using both ordinary least squares (OLS) with detailed control variables and including individual fixed effects. We find approximately 7% returns for most MBAs but roughly double that for finance and management information systems (MIS). Thus, MBA area of study can matter as much or more than program quality: only attending a top 10, but not 11-25, MBA program trumped studying finance and MIS at a nontop 25 program. (JEL I21, J30, J24)

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