PPP is distorting the FT EMBA rankings


Duncan
It's interesting to see now how the FT's purchasing power parity methodology is distorting the rankings, which were published yesterday at http://rankings.ft.com/businessschoolrankings/emba-ranking-2013. We are starting to see programmes with lots of Chinese students pushing up the rankings, to the point where half the top 12 programmes are Chinese. The greater difference between the wages of EMBAs and the very low average wage in China pushes these programmes up. You can see from the 'aims achieved' score that top programmes in China are not all delivering a top-tier experience: Tsinghua-Insead ranks 23rd; Olin-Fudan is 28th, Ceibs is 37th, CUHK is 96th yet these are four of the six top programmes when ranked by PPP salary.

PS Another suggestion that not all of these are as strong as they look, are the Sun Yat-sen Business School EMBA and joint USC-SJTU GEMBA which burst into the top 30 last year, only to drop out totally this year.
It's interesting to see now how the FT's purchasing power parity methodology is distorting the rankings, which were published yesterday at http://rankings.ft.com/businessschoolrankings/emba-ranking-2013. We are starting to see programmes with lots of Chinese students pushing up the rankings, to the point where half the top 12 programmes are Chinese. The greater difference between the wages of EMBAs and the very low average wage in China pushes these programmes up. You can see from the 'aims achieved' score that top programmes in China are not all delivering a top-tier experience: Tsinghua-Insead ranks 23rd; Olin-Fudan is 28th, Ceibs is 37th, CUHK is 96th yet these are four of the six top programmes when ranked by PPP salary.

PS Another suggestion that not all of these are as strong as they look, are the Sun Yat-sen Business School EMBA and joint USC-SJTU GEMBA which burst into the top 30 last year, only to drop out totally this year.
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ezra
Yes, hopefully this equalizes over the next few years (although that's highly doubtful.)

I agree that this particular ranking is somewhat distorted by this. But what's curious is that the full-time Global MBA ranking, which also use PPP as part of the methodology, doesn't have the same kind of skew towards programs in China. There's only two programs in China in the top 25, and one of those is actually in Hong Kong.
Yes, hopefully this equalizes over the next few years (although that's highly doubtful.)

I agree that this particular ranking is somewhat distorted by this. But what's curious is that the full-time Global MBA ranking, which also use PPP as part of the methodology, doesn't have the same kind of skew towards programs in China. There's only two programs in China in the top 25, and one of those is actually in Hong Kong.
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Duncan
I wonder if the auditing of the full-time results also has an impact? Clearly there's big difference between the salaries of the Chinese 'princes' and 'princelings' and the graduates of the full-time programmes. And the numbers of international students are also much greater, I imagine, on the full-time students.

As the Yuan rises, I'm not sure this trend will reduce. On a PPP basis the average salaries of Chinese programmes have more than doubled in the FT rankings, and there will be several factors at work there.
I wonder if the auditing of the full-time results also has an impact? Clearly there's big difference between the salaries of the Chinese 'princes' and 'princelings' and the graduates of the full-time programmes. And the numbers of international students are also much greater, I imagine, on the full-time students.

As the Yuan rises, I'm not sure this trend will reduce. On a PPP basis the average salaries of Chinese programmes have more than doubled in the FT rankings, and there will be several factors at work there.
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mcgr
Bumping an old post, but I've been curious about the reliability of the salary data published by FT. I don't have access to their methodology, but am wondering ow much PPP can distort things, and any other distortions that might be going on? I'm particularly interested in the EMBA salary numbers, since those seem very high with a quarter showing salaries of over $200K (also not clear, is this average or median?). I've had a lot of interactions with current students plus alumni from some of these programs, and the types of roles they are currently in are not of the type that I would expect to make anywhere close to that kind of money, so I've got some skepticism. Since the data is self reported, and it comes from a pretty small sample, it seems like there could be some incentive to inflate your own numbers. Curious what other people think.
Bumping an old post, but I've been curious about the reliability of the salary data published by FT. I don't have access to their methodology, but am wondering ow much PPP can distort things, and any other distortions that might be going on? I'm particularly interested in the EMBA salary numbers, since those seem very high with a quarter showing salaries of over $200K (also not clear, is this average or median?). I've had a lot of interactions with current students plus alumni from some of these programs, and the types of roles they are currently in are not of the type that I would expect to make anywhere close to that kind of money, so I've got some skepticism. Since the data is self reported, and it comes from a pretty small sample, it seems like there could be some incentive to inflate your own numbers. Curious what other people think.
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Razors Edg...
They're very transparent with their methodology:

https://www.ft.com/content/1ce8a26a-817f-11e6-8e50-8ec15fb462f4

Salary listed is average salary. In short, PPP will distort the rankings for programs that recruit students from countries where wages are generally low and having an EMBA will create a huge difference. Duncan's first post in this thread, almost four years old now, is still pretty much what's happening.

The ranking is generated from two surveys: one for the schools and the other for alumni. The salary data is reported by alumni. Mostly, I trust the salary data: I doubt a school that wanted to game the ranking would be able to convince a whole class of graduates to falsify their salary info; and in any case, why would alumni want to mis-report their earnings? What incentive would they have?
They're very transparent with their methodology:

https://www.ft.com/content/1ce8a26a-817f-11e6-8e50-8ec15fb462f4

Salary listed is average salary. In short, PPP will distort the rankings for programs that recruit students from countries where wages are generally low and having an EMBA will create a huge difference. Duncan's first post in this thread, almost four years old now, is still pretty much what's happening.

The ranking is generated from two surveys: one for the schools and the other for alumni. The salary data is reported by alumni. Mostly, I trust the salary data: I doubt a school that wanted to game the ranking would be able to convince a whole class of graduates to falsify their salary info; and in any case, why would alumni want to mis-report their earnings? What incentive would they have?
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mcgr
Thanks for the reply. I need a FT subscription to read the methodology, which I currently don't have, but I appreciate the summary.

I often have access to individual salary data for small and midsize companies in innovative industries. Many of the top employees will have PhD degrees in STEM fields from top universities, yet they make nowhere near the averages being reported from alumni surveys. Many times even the CEO will only just barely hit the $200K mark, and these are for relatively successful small companies. So I tend to come at this with skepticism and wonder if high overall compensation in some areas like Finance and Consulting are skewing the numbers, and alumni in other area are making considerably less than the averages?

As far as the motivation to exaggerate salary numbers, I can think of a few possibilities. One, it's just general human nature to want to appear as successful as possible and knowing what the average of people with your credentials earn could make you want to appear at least as successful as the average so you exaggerate. Or maybe you include other compensation beyond just salary like your best bonus ever, and report that as your salary. There also could be an incentive to exaggerate and then use the inflated numbers of your cohort to try to negotiate a better salary for yourself, by pointing out that you are significantly below the average.

None of those are particularly convincing to me, but then neither is the idea that mid-level marketing people are making $200K.
Thanks for the reply. I need a FT subscription to read the methodology, which I currently don't have, but I appreciate the summary.

I often have access to individual salary data for small and midsize companies in innovative industries. Many of the top employees will have PhD degrees in STEM fields from top universities, yet they make nowhere near the averages being reported from alumni surveys. Many times even the CEO will only just barely hit the $200K mark, and these are for relatively successful small companies. So I tend to come at this with skepticism and wonder if high overall compensation in some areas like Finance and Consulting are skewing the numbers, and alumni in other area are making considerably less than the averages?

As far as the motivation to exaggerate salary numbers, I can think of a few possibilities. One, it's just general human nature to want to appear as successful as possible and knowing what the average of people with your credentials earn could make you want to appear at least as successful as the average so you exaggerate. Or maybe you include other compensation beyond just salary like your best bonus ever, and report that as your salary. There also could be an incentive to exaggerate and then use the inflated numbers of your cohort to try to negotiate a better salary for yourself, by pointing out that you are significantly below the average.

None of those are particularly convincing to me, but then neither is the idea that mid-level marketing people are making $200K.
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mba hipste...
A couple of things:

The 2016 data is for the class of 2013, so several years after completing the respective EMBA programs. At this point, according to the FT data, the majority of graduates surveyed weren't mid-level but CEOs, presidents, VPs, partners, etc. And many of these EMBAs are at largish, global companies: the FT data says that almost a third of 2013 UCLA - NUS EMBAs are in corporations with over 50,000 people. Salaries for these positions at this level of firm can often top $200k or more.

Also, I think you're right - a good number of these EMBAs are in finance / consultancies, which probably drive up salaries as well.

I get your points about the incentives to mis-report salaries. Maybe that's a factor as well.
A couple of things:

The 2016 data is for the class of 2013, so several years after completing the respective EMBA programs. At this point, according to the FT data, the majority of graduates surveyed weren't mid-level but CEOs, presidents, VPs, partners, etc. And many of these EMBAs are at largish, global companies: the FT data says that almost a third of 2013 UCLA - NUS EMBAs are in corporations with over 50,000 people. Salaries for these positions at this level of firm can often top $200k or more.

Also, I think you're right - a good number of these EMBAs are in finance / consultancies, which probably drive up salaries as well.

I get your points about the incentives to mis-report salaries. Maybe that's a factor as well.
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