The Economist’s Winners & Losers

by John A. Byrne on

The Economist admits it upfront. In the fine print of its MBA ranking methodology, the magazine slaps a warning on its own product akin to a message you might see on a bottle of medication:

“Results of rankings can be volatile, so they should be treated with caution.”

Amen.

Some 23 of the 100 business school’s on The Economist’s 2012 list published today (Oct. 4) experienced double-digit falls or rises over last year. And that number doesn’t account for the schools that either dropped out altogether or surfaced out of the blue, many of which had double-digit changes as well.

FOR MANY BUSINESS SCHOOLS, THE ECONOMIST RANKING IS ONE, WILD ROLLER COASTER RIDE

Many prominent business schools clearly felt extreme volatility in how they were ranked–or not–by The Economist. At least a half dozen schools fell off the list entirely, likely because the sample size obtained by the magazine of alums fell below its minimum threshold. Among the disappearing schools are Ashridge, ranked 72nd last year; Edinburgh, previously ranked 84th; Thunderbird (87); Tilburg (93); the University of Florida (97), and the University of South Carolina (99).

THE BIGGEST LOSERS THIS YEAR: VIERICK LEUVEN AND UNIVERSITY COLLEGE DUBLIN

Then, the other big losers this year were schools that fell by double-digits in a single year. Vierick Leuven and University College Dublin’s Smurfit School both plunged 25 places to finish 66th and 63rd, respectively. Other than falling off the list entirely, no other MBA programs ranked by The Economist turned in a year-over-year performance as bad as a 25-place drop.

The U.S. school losing the most ground in The Economist survey this year was the University of Southern California’s Marshall School. It fell 21 spots to a rank of 43rd from 22 last year. Penn State’s Smeal School of Business didn’t fare much better. It plummeted 18 places to a rank of 68th from 50th in 2011.

THE BIGGEST WINNERS: IIM-AHMEDAHAD AND LANCASTER UNIVERSITY

And the winners? The single biggest gain in this year’s ranking went to the Indian Institute of Management-Ahmedahad in India. The school jumped 22 places to a rank of 56th this year, up from 78th in 2011. Lancaster University Management School also did exceptionally well, rising 20 spots to rank 80th in the survey from 100th last year.

The U.S. schools with the biggest lifts in The Economist ranking were Temple University’s Fox School of Business which moved up a dozen places to a rank of 77 from 89th in 2011. Cornell University’s Johnson School climbed 10 places to a rank of 15th from 25th a year earlier. Georgetown University’s McDonough School rose nine spots to finish 35th, up from 44th last year.

The business schools which entered the list after being absent last year included Arizona State, ranked 59th; Texas Christian (71), the International University of Japan (79); St. Gallen University (81); WHU in Germany (87); the Simon Graduate School of Business at the University of Rochester (89); the International University of Monaco (97), and Case Western Reserve University’s Weatherhead School of Management (100th).

WHAT VOLATILITY GENERALLY TELLS YOU ABOUT A RANKING

What does such wild volatility in a ranking suggest? Mostly that the underlying data reflecting the rank each school is assigned is so close that it is statistically meaningless. The Economist, unlike some ranking organizations, does not disclose the underlying index behind each school’s rank, largely because it would inevitably show that there is little if any difference among many of the ranked schools.

That is why even insignificant changes in the metrics that The Economist uses to rank schools can produce fairly unusual swings in the rankings. Not only is The Economist aware of this problem. It also adjusts its methodology to dampen down the impact of large changes. As the magazine explains, “Memory has been built into the rankings by taking a weighted average of 2011 (50%), 2010 (30%) and 2009 (20%) data to provide a rounded picture of the school. Sudden movements in data, which might not produce an immediate increase in quality, are thus reflected gradually, much as the improvement would affect students.”

If not for a little memory, far more schools would be on the roller coaster ride.

(See following page for a table of the biggest winners and losers in The Economist’s 2012 business school ranking)

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  • Jamie Templeton

    This ranking system gets more and more laughable as the years go by. The system unfairly rewards a system just because it is attracting less “elite” students with much lower pre-MBA salaries. So a Harvard might bring a jump from a 7 to a 9.5 in terms of salary since most HBS accepts have pretty great pre-MBA salaries to start with and they are probably looking at the quality of work rather than just a pure increase in salary while picking their post-MBA job. A Darden on the other hand might have a 4 to 7.5 jump for its grads and the system rewards that more. That is fair enough to judge the bang for the buck but IMO should be weighted appropriately and not become the primary source of ranking. Proof is in the pudding – do a quick survey on people who a Tuck for an INSEAD, or a Darden for Stanford, etc. I’m sure it would be close to a 100% rate. HBS/Stanford are still unquestionably the top 2 overall, INSEAD/Kellogg tops for Consulting, Wharton/LBS/Chicago for Finance. Dont fall for the rankings rollercoaster…pick a college with a brand and legacy that will last you a lifetime

  • Jamie Templeton

    This ranking system gets more and more laughable as the years go by. The
    system unfairly rewards a system just because it is attracting less
    “elite” students with much lower pre-MBA salaries. So a Harvard might
    bring a jump from a 7 to a 9.5 in terms of salary since most HBS accepts
    have pretty great pre-MBA salaries to start with and they are probably
    looking at the quality of work rather than just a pure increase in
    salary while picking their post-MBA job. A Darden on the other hand might have a 4 to 7.5 jump
    for its grads and the system rewards that more. That is fair enough to
    judge the bang for the buck but IMO should be weighted appropriately and
    not become along with student given ratings, the primary source of ranking. The proof is in the pudding – do a
    quick survey on people who would leave a Tuck for an INSEAD, or a Darden for
    Stanford, etc. I’m sure it would be close to a 100% rate. HBS/Stanford are still unquestionably the top 2 overall, INSEAD/Kellogg tops for Consulting, Wharton/LBS/Chicago for Finance. Dont fall for the rankings rollercoaster…pick a college with a brand and legacy that will last you a lifetime.

  • http://www.facebook.com/prasadjoglekar Prasad Joglekar

    When you suggest ” would leave a Tuck for an INSEAD…”, you’re assuming those people didn’t make a conscious choice about which school to attend in the first place. As a Tuck grad, I can tell you I had choices (good ones) and chose to go to Tuck. The rankings are a reflection of what people who’re IN those schools think about them.

  • barson

    Stern>LBS for sure in Finance and at par with the other 2

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