ABSTRACT

The theme of paper is nothing more than an attempt to evaluate the allocative efficiency of resources devoted to management education. Its utility lies mainly in indicating the investment characteristic of management education revealing the areas of high and low returns. The study will find out positive total and differential costs and benefits associated with various levels of management education with basic introduction of cost benefit (C-B) analysis. A historical update of C-B analysis and rate of return (RoR) studies has been briefly analyzed with reference to above theme. It also traces the need and importance of said theme. The paper will analyze the direct costs and benefits of management degree course in national capital territory region of Delhi. The differentials were also traced out by the cost and benefits structure of management degree at different levels, and schooling types including institution category. The returns to investment in management degree were calculated through standardized Mincerian earning function approach. The unit cost derived from the estimates of management degree course is INR 86650. The mean annual salary of employee with management degree is INR 5.54 lacs. The annual salary with some years of labour market experiences is much higher than the initial salary expected by the management graduates. The private RoR for management schooling year in IT industry is 12.2%. The interaction coefficient between years of management degree and labour market experience come out to be negative, indicating substitutability between the two.