Best ROI MBA Programs : The B-School Applications

bb · 2021-06-02T22:11:08-07:00

MBA Programs with Highest ROI I have put together a list of the most expensive MBA programs in the world but the biggest question was, what is the best investment? Are the lower cost Top 20 MBA programs represent a better investment? The answer was a surprise to me! Surprises: 🎉✨ 1. Canadian Programs have the lowest ROI out of all Top 30 programs compared . Both Rotman and Schulich scored on the low end of the spectrum. The main contributing factor that ranked Rotman and Schulich were their comparatively low salaries of sub $100K vs. $150K for the US programs. 2. UK Programs performed as second worst in terms of ROI. Even though Judge and Said cost about half of their US counterparts, lower pay at graduation combined with higher taxes and cost of living, pushed these programs to the bottom of the rankings 3. When you make 175K on Paper, your take home pay is only about a half, after you subtract taxes and loan costs . 4. Best ROI Rank goes to Johnson . This was unexpected. I was thinking perhaps Darden that has a low cost and high income due to IB jobs or maybe Kellogg. However, Johnson is in the lead by less than $200 . Most of the US programs are tightly grouped which means getting more precise data (more on that below) would likely shift the rankings quite a bit. The reason for the Johnson's win is lower total cost and high salary numbers. Highest MBA ROI - Top 30 # MBA Program Total Cost Average Comp COL Adjust Adjusted Income After Loan and Taxes Notes 1 Johnson $200,698 $172,254 $92,615 2 Darden $186,828 $169,190 $92,402 3 Kellogg $211,194 $173,057 $91,714 4 Booth $216,681 $172,683 $90,688 5 Stanford $239,928 $176,083 $89,829 6 Fuqua $196,608 $167,134 $89,600 7 Tuck $233,620 $173,882 $89,167 8 Stern $240,002 $175,148 $89,164 30% Tax 9 HBS $224,584 $171,785 $88,958 10 Tepper $197,358 $165,540 $88,380 11 Wharton $230,864 $172,016 $88,245 12 Ross $194,536 $164,040 $87,723 13 Columbia $233,204 $171,436 $87,513 14 McCombs $162,148 $154,211 $85,356 15 Yale $205,980 $162,856 $85,300 16 Foster $155,355 $151,683 $84,532 17 Marshall $180,918 $156,581 $84,399 18 Haas $212,496 $162,409 $84,079 19 IESE $141,840 $155,843 0.92 $80,328 40% Average Tax Rate; Average EU salary and bonus 20 Anderson $205,699 $154,511 $79,498 21 Sloan $239,652 $160,291 $78,813 22 HEC $125,100 $146,428 0.92 $76,551 40% Average Tax Rate; Includes sign on and performance bonus 23 INSEAD $140,040 $136,000 0.92 $67,632 40% Average Tax Rate; Average EU salary and bonus 24 NUS (2Y) $88,087 $88,690 1.04 $66,027 Approx 7% Tax; no bonus mentioned. Data from Economist 25 ESADE $120,420 $127,153 0.92 $64,689 40% Average Tax Rate; Employment report issues; Bonus is estimated 26 ISB (1Y) $51,833 $34,335 0.34 $59,758 20% Tax; No bonus mentioned in employment report 27 LBS $204,129 $168,326 1.29 $58,871 38% Tax 28 Said $109,300 $133,000 1.29 $52,117 38% Tax 29 Judge (1Y) $103,700 $129,898 1.29 $51,231 38% Tax 30 Rotman $132,044 $92,741 0.96 $49,335 29% Tax 31 Schulich $118,340 $85,520 0.96 $44,231 29% Tax Anything surprising to you? Assumptions: This ranking looks at the first full year of employment. I am not getting into the details of how long it takes to find a job and when who starts working Graduates stay within their region/continent. E.g. US graduates stay in the US and those who graduated in Europe would stay in Europe. If your plan is different, you may want to do your own calculation or just apply a multiplier Costs of living in New York City are different from those in El Paso. I have assumed people would be living in major metro areas which is why I have averaged the costs of living and tax rates. Cost of Living in the US was average of major metropolitan areas (Bay Area, New York City, Chicago, Los Angeles, Boston, Austin, Phonenix, Nashville, Seattle) and was set to 1.0. All other cost of living is based on this index. Cost of living is designed to represent equivalent incomes in dollar amounts. Cost of living in the UK was set to London Cost of Living in Europe was an average of Paris, Frankfurt, Amsterdam, Barcelona, and Rome US Tax rate was average of tax paid by residents of NY, IL, CA, WA, and TX Further improvement could be calculating more specifically location of graduates reporting their jobs/income and refining the numbers further based on regional salaries, costs of living, and local taxes. Doing this would likely impact the ranking and shift schools in high-cost areas lower (e.g. Haas, Stanford, Stern, Columbia, and Johnson) since those schools have graduates mostly residing in Bay Area and New York City which account for some of the highest tax and cost of living numbers. Different industries pay diff rates. Your pay will differ; I used average across the entire program. All numbers have been converted into USD Assume 7% Interest rate on the total cost of attendance; 10 year term The ranking does not take into consideration 12-month MBA programs which would allow you to work sooner and give you a 2% bump to your lifetime earnings. One way to account for this is to look at 10-year earnings and multiple 1-year program amount by 11 instead. Notes: I had trouble locating an ESADE employment report - the site would not let me download it so I had to estimate the bonus amount. ISB employment report did not provide any bonus details COL Adjustment = Cost of Living Index Adjustment. The numbers were divided by this coefficient.

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Highest MBA ROI - Top 30
#	MBA Program	Total Cost	Average Comp	COL Adjust	Adjusted Income After Loan and Taxes	Notes
1	Johnson	$200,698	$172,254		$92,615
2	Darden	$186,828	$169,190		$92,402
3	Kellogg	$211,194	$173,057		$91,714
4	Booth	$216,681	$172,683		$90,688
5	Stanford	$239,928	$176,083		$89,829
6	Fuqua	$196,608	$167,134		$89,600
7	Tuck	$233,620	$173,882		$89,167
8	Stern	$240,002	$175,148		$89,164	30% Tax
9	HBS	$224,584	$171,785		$88,958
10	Tepper	$197,358	$165,540		$88,380
11	Wharton	$230,864	$172,016		$88,245
12	Ross	$194,536	$164,040		$87,723
13	Columbia	$233,204	$171,436		$87,513
14	McCombs	$162,148	$154,211		$85,356
15	Yale	$205,980	$162,856		$85,300
16	Foster	$155,355	$151,683		$84,532
17	Marshall	$180,918	$156,581		$84,399
18	Haas	$212,496	$162,409		$84,079
19	IESE	$141,840	$155,843	0.92	$80,328	40% Average Tax Rate; Average EU salary and bonus
20	Anderson	$205,699	$154,511		$79,498
21	Sloan	$239,652	$160,291		$78,813
22	HEC	$125,100	$146,428	0.92	$76,551	40% Average Tax Rate; Includes sign on and performance bonus
23	INSEAD	$140,040	$136,000	0.92	$67,632	40% Average Tax Rate; Average EU salary and bonus
24	NUS (2Y)	$88,087	$88,690	1.04	$66,027	Approx 7% Tax; no bonus mentioned. Data from Economist
25	ESADE	$120,420	$127,153	0.92	$64,689	40% Average Tax Rate; Employment report issues; Bonus is estimated
26	ISB (1Y)	$51,833	$34,335	0.34	$59,758	20% Tax; No bonus mentioned in employment report
27	LBS	$204,129	$168,326	1.29	$58,871	38% Tax
28	Said	$109,300	$133,000	1.29	$52,117	38% Tax
29	Judge (1Y)	$103,700	$129,898	1.29	$51,231	38% Tax
30	Rotman	$132,044	$92,741	0.96	$49,335	29% Tax
31	Schulich	$118,340	$85,520	0.96	$44,231	29% Tax

Highest MBA ROI - Top 30

MBA Program

Total Cost

Average
Comp

COL
Adjust

Adjusted Income After
Loan and Taxes

Notes

Johnson

$200,698

$172,254

$92,615

Darden

$186,828

$169,190

$92,402

Kellogg

$211,194

$173,057

$91,714

Booth

$216,681

$172,683

$90,688

Stanford

$239,928

$176,083

$89,829

Fuqua

$196,608

$167,134

$89,600

Tuck

$233,620

$173,882

$89,167

Stern

$240,002

$175,148

$89,164

30% Tax

HBS

$224,584

$171,785

$88,958

Tepper

$197,358

$165,540

$88,380

Wharton

$230,864

$172,016

$88,245

Ross

$194,536

$164,040

$87,723

Columbia

$233,204

$171,436

$87,513

McCombs

$162,148

$154,211

$85,356

Yale

$205,980

$162,856

$85,300

Foster

$155,355

$151,683

$84,532

Marshall

$180,918

$156,581

$84,399

Haas

$212,496

$162,409

$84,079

IESE

$141,840

$155,843

0.92

$80,328

40% Average Tax Rate; Average EU salary and bonus

Anderson

$205,699

$154,511

$79,498

Sloan

$239,652

$160,291

$78,813

HEC

$125,100

$146,428

0.92

$76,551

40% Average Tax Rate; Includes sign on and performance bonus

INSEAD

$140,040

$136,000

0.92

$67,632

40% Average Tax Rate; Average EU salary and bonus

NUS (2Y)

$88,087

$88,690

1.04

$66,027

Approx 7% Tax; no bonus mentioned. Data from Economist

ESADE

$120,420

$127,153

0.92

$64,689

40% Average Tax Rate; Employment report issues; Bonus is estimated

ISB (1Y)

$51,833

$34,335

0.34

$59,758

20% Tax; No bonus mentioned in employment report

LBS

$204,129

$168,326

1.29

$58,871

38% Tax

Said

$109,300

$133,000

1.29

$52,117

38% Tax

Judge (1Y)

$103,700

$129,898

1.29

$51,231

38% Tax

Rotman

$132,044

$92,741

0.96

$49,335

29% Tax

Schulich

$118,340

$85,520

0.96

$44,231

29% Tax

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