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Structural and perceptual determinants of the price of online business education

Hooman Estelami (Fordham University, New York, New York, USA)
Zeinab Rezvani (VU University Amsterdam, Amsterdam, The Netherlands)

Journal of Product & Brand Management

ISSN: 1061-0421

Article publication date: 19 April 2011

1152

Abstract

Purpose

The purpose of this article is to conduct a formal study of how the prices for online MBA programs in the USA are determined. The paper examines the effects of perceptual (e.g. rankings and accreditation) and structural characteristics (e.g. program length, program format) of online MBA programs on tuition levels charged.

Design/methodology/approach

Publicly available secondary data from a sample of 115 online MBA programs in the USA, including program characteristic information and prices, is used. Regression analysis is used to uncover the underlying pricing model.

Findings

Perceptual variables are found to have significantly greater effect on prices charged than structural variables, at times enabling institutions to nearly double their revenue stream on a per‐student basis.

Research limitations/implications

The research approach can be extended to uncover the pricing models used in distance learning programs in fields other than business, and to examine such relationships outside the scope of American institutions.

Originality/value

The use of distance learning methods for delivering course instruction in degree‐granting institutions has witnessed significant growth over the last decade. This trend has enhanced the ability of business schools to serve students that are geographically dispersed, and today nearly 400 such programs are offered in the USA alone. Despite the growth, no formal study has examined how prices (tuition levels) for such programs are determined.

Keywords

Citation

Estelami, H. and Rezvani, Z. (2011), "Structural and perceptual determinants of the price of online business education", Journal of Product & Brand Management, Vol. 20 No. 2, pp. 158-165. https://doi.org/10.1108/10610421111121152

Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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