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The Master’s in Business Administration (MBA), once a flagship program in business schools, has lost its appeal in recent years (The Wall Street Journal, June 5, 2019). While elite schools like Harvard, Wharton, and Chicago are still attracting applicants, other schools are finding it much harder to entice students. As a result, business schools are focusing on specialized master’s programs to give graduates the extra skills necessary to be career ready and successful in more technically challenging fields. An educational researcher is trying to analyze the determinants of the applicant pool for the specialized Master of Science in Accounting (MSA) program at medium-sized universities in the United page 265 States. Two important determinants are the marketing expense of the business school and the percentage of the MSA alumni who were employed within three months after graduation. Consider the data collected on the number of applications received (Applicants), marketing expense (Marketing, in $1,000s), and the percentage employed within three months (Employed); a portion of the data is shown in Table 7.6.

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a. Estimate and interpret the effect of Marketing and Employed on the number of applications received. For a given marketing expense of $80,000, predict the number of applications received if 50% of the graduates were employed within three months. Repeat the analysis with 80% employed within three months.

b. Extend the model in part a to include the interaction between Marketing and Employed. For a given marketing expense of $80,000, predict the number of applications received if 50% of the graduates were employed within three months. Repeat the analysis with 80% employed within three months.

 

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