FT Global MBA Rankings 2018

maury

442 353

Posted Feb 02, 2018 21:05

I get the feeling the PPP does not really reflect reality as intended

One hand it gives schools from 3rd countries a chance to compete, but in reality, most people ask for advice to choose schools in U.S. the U.K. the EU and lately Canada - and real salaries (not PPP ones) are definitely a factor

It's a bit tricky for schools in countries like India where the overall salaries in real terms are far lower than other regions represented in the rankings. I think the real average salary of recent IIMA grads converts to around $27,000 USD - if you're comparing real values then there's no way that school could compete against MBAs in the US / UK / Europe / most rest of the west. Same thing with a school like Fudan, where the converted average salaries in real terms are around $38,000 USD.

However, if you look at other factors like cost of living for MBAs living in a country like India versus the rest of the west, the whole picture looks a bit different. That $27k is going to go a long way, in perspective.

Even so, I agree that it's often like comparing apples to oranges. I think the FT - at least for this Global MBA Ranking - does a good job in weighing all the various factors that go into the ranking, relatively fairly. It's never going to be perfect, but it's sort of 'good enough' without having to have separate rankings for each country.

The EMBA ranking is another story. I think in this case PPP works to inflate the salaries of partner EMBA where one b-school partner is in a country like China.

[quote]I get the feeling the PPP does not really reflect reality as intended

One hand it gives schools from 3rd countries a chance to compete, but in reality, most people ask for advice to choose schools in U.S. the U.K. the EU and lately Canada - and real salaries (not PPP ones) are definitely a factor
[/quote]

It's a bit tricky for schools in countries like India where the overall salaries in real terms are far lower than other regions represented in the rankings. I think the real average salary of recent IIMA grads converts to around $27,000 USD - if you're comparing real values then there's no way that school could compete against MBAs in the US / UK / Europe / most rest of the west. Same thing with a school like Fudan, where the converted average salaries in real terms are around $38,000 USD.

However, if you look at other factors like cost of living for MBAs living in a country like India versus the rest of the west, the whole picture looks a bit different. That $27k is going to go a long way, in perspective.

Even so, I agree that it's often like comparing apples to oranges. I think the FT - at least for this Global MBA Ranking - does a good job in weighing all the various factors that go into the ranking, relatively fairly. It's never going to be perfect, but it's sort of 'good enough' without having to have separate rankings for each country.

The EMBA ranking is another story. I think in this case PPP works to inflate the salaries of partner EMBA where one b-school partner is in a country like China.

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George Pat...

597 233

Posted Feb 02, 2018 23:22

Well yes, that holds true if these persons are staying only in that country, invest in that country, do not travel abroad

Let me try to explain my reasoning:
A guy that makes 27k in india may save 15k per year
A guy that makes 150k in chicago, may save 50k per year
(those two schools Ahmedabad and Booth have almost equal PPP)

At local level, with their savings each person may buy equal amount of bread. Equal amount of meat etc. So if they live only in their own country forever, they will get the same amount of things (in theory) and PPP will work reasonably well.
But the moment they want to deal internationally, travel abroad, buy property abroad, or invest in other countries etc, the reality will kick in

Examples:
-In a luxury hotel in Dubai costing 1000 per night, the person with 50k savings may spend 50days, whereas the person with 15k savings will spend there only 15days

-To buy the small beach house in south spain that costs 45k, the person from chicago will need one year savings, but the person from Ahmedabad will need to save for 3 years

-Even in tech items, prices are usually very close between countries, the guy in India may buy 20iphones with his savings, the guy in chicago may buy 50iphones with his savings

The numbers are a bit made up, but I think actual numbers would wield same result. That the moment you deal with other countries, your purchasing power back home matters less.

We live in a world that is more and more international and global, and the PPP seems to me that checks only local power. And in my opinion (without data to support it) the people that go to such top schools, are more international, more open to relocation, and international dealings and investments, than the average person

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maury

442 353

Posted Feb 05, 2018 17:29

Yes, I agree in general. But I think PPP generally reflects quality of life / cost of living for day-to-day expenses, and most likely wouldn't take into account international travel. I do appreciate how international travel can improve quality of life, but I'm not sure that it really should impact PPP substantially. I mean it's really more of a marginal benefit to having additional cash.

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