Pricing segmentation and MBA course choice

Abstract

The consensus from studies of the price-demand relationship for higher education is that this relationship is negative but small. This paper investigates the circumstances in which demand for an MBA is positive to price increases. A survey of currently enrolled MBA students, and prospective MBA students, found that most students displayed the expected price elasticity in a conjoint analysis of hypothetical MBA course ratings. However, 12 per cent of respondents exhibited &ldquo;reversal&rdquo; behaviour regarding price. Profiling these respondents using discriminant analysis suggested that &ldquo;reversals&rdquo; seemed prepared to pay more for a course at a high prestige university, if they could study off-campus using print-based materials.<br /