Economics Department


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Published in Economic Inquiry 42:2 (April 2004), pp. 319-322; doi 10.1093/ei/cbh063 Copyright © 2004 Western Economic Association International. Used by permission.


This article shows how admission and enrollment processes affect the interpretation of simple validation studies of academic performance. In a competitive market for students, optimal behavior of admissions committees and applicants drives the simple correlation between test scores and performance toward zero, regardless of the relationship in the population of prospective students. Data from our university’s MBA program support the prediction that applicants exhibit a higher correlation between test scores and undergraduate GPAs than do current students. This suggests that standard validation studies will understate the importance of GMAT scores in predicting performance of potential MBA students.

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