GMAT Still Holds A Commanding Lead But GRE Has Tripled Its Share Of The B-School Market Since 2017

The latest revisions to the two exams that MBA and other graduate business school applicants take are yet more evidence of an ongoing arm’s race between the makers of the GMAT and the GRE. The Educational Testing Service (ETS), the administrator of the GRE exam, has wrested more and more of the business school market away from the Graduate Management Admission Council (GMAC).

GMAC still holds a commanding lead, though it continues to shrink. Since testing year 2016-2017 to 2021-2022, the GRE has nearly tripled its share of the business school market to 22.9% from 7.6%, even while the overall market has shrunk in size, according to an analysis by Poets&Quants (see chart below). No less important, the estimates for GRE are undercounted because 23% of the test takers who sit for the GRE failed to indicate a graduate field of study or were undecided. The loss of share has cost GMAC an estimated $3.7 million in revenue in 2021-2022 alone.

At many of the most highly selective business schools, MBA students enrolling with a GRE have doubled or tripled over the same timeframe (see Average GRE Scores At The Top 50 U.S. Business Schools). At The Wharton School, 30% of the students enrolled last fall submitted a GRE with their application, up from 10% in 2018. At Stanford’s Graduate School of Business, 33% of the latest cohort took the GRE, up from 18% five years ago. And at UC-Berkeley’s Haas School of Business, 45% enrolled with the GRE, up from only 11% in 2018.


What's behind the decline and will the new streamlined exams halt the GMAT's declining market share? That's the big question.

The Educational Testing Service, the maker of the GRE, has aggressively marketed the alternative test to business schools that have embraced the test as an equal to the GMAT, with no preference for either exam. "The story here is one of agnosticism or even ambivalence, rather than a feature of one test or the other," explains Jeremy Shinewald, president of mbaMission, a leading MBA admissions consulting firm. "In the aughts, most programs started accepting both and now they are 'Coke vs. Pepsi' for most applicants. It took years for the adcoms and ETS to destigmatize the GRE and now we are there.

Many prospective students also believe, rightly or wrongly, that the quant on the GRE is somewhat easier than it is on the GMAT. As Shinewald adds, "For a small number of applicants, there is still an arbitrage opportunity. If you take a program like Wharton, they have a 730+ GMAT average and their 162/162 GRE average converts to about a 670 when expressed in GMAT terms. So, if you know you are not going to do well on any standardized test, the GRE is the better test for you. I imagine that when that arbitrage is eliminated, we will really be at peak ambivalence."


In fact, a recent analysis by ApplicantLab's Maria Wich-Vila proves that point (see table below). Among the most recently enrolled class of MBA students at Stanford, the average GMAT score was in the 3% of all test takers worldwide, while students who submitted a GRE were in the top 15% of test takers, a differential of 12 percentile scores. The gap was even greater at many other business schools: At Duke Fuqua, the class GMAT average  put enrolled MBAs in the upper 10% of all test takers, while the average class GRE was in the 29th percentile.

But the market share gains also are a function of ETS' continual introduction of features that have made the GRE more test friendly to those who take it and innovations that have often put the GRE ahead of the GMAT. "With the onset of COVID, the GRE responded more rapidly to the need for an online test, becoming the option for a short while, and further establishing their presence as an option thereafter," says Hailey Cusimano, director of tutoring at Menlo Coaching.

She doesn't think the newest revisions of both tests, which now make the GRE shorter than the GMAT, will have much impact on the race between the two standardized test players. "Given that both exams are now included in the U.S. News ranking, the "GMAT vs. GRE" decision for students has become more and more a matter of which test the student feels best reflects their potential," adds Cusimano. "With the upcoming release of the GMAT Focus and respective changes to the GRE, I expect that students will continue the trend of more proactively considering the differences in structure and testing style between exams, and will make the choice that best allows them to succeed. Neither test's update really grants one favor over the other, but these changes are certainly reinforcing the importance of being strategic about the structure and testing style each student elects to study for, and how it best reflects their strengths!"


Scott Woodbury-Stewart, founder and CEO of Target Test Prep, believes the newly streamlined  tests will ultimately favor the GMAT. "With the release of the new versions of the tests, we may see a return to the GMAT," he says. "Without Geometry and Sentence Correction, the GMAT may become more attractive than the GRE to MBA applicants because the GRE will still have Text Completion and Sentence Equivalence questions that emphasize vocabulary knowledge over the critical thinking skills these applicants commonly have. Also, the fact that the GMAT Focus Edition is more focused on testing skills directly related to business than the GRE will likely cause business schools to prefer GMAT scores over GRE scores.

"So is the GRE going to overpower the GMAT for B-school admissions? I really don't think so. I think we'll see, and we are seeing, a reversion to the mean. I believe that the GMAT will be the test of choice for many, if not most, business school applicants over the next decade."

DON'T MISS: The New Shorter GRE: Less Than Two Hours Long or Revamped GMAT Exam Will Be Nearly One Hour Shorter

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