The Problem Of Adverse Selection In Business Education

Abstract

The quality of output from a process, to a substantial extent, depends upon quality of the input. The performance of an educational institution badly suffers when it faces a ‘wear out’ in the quality of its in-take. Sometimes it is a deficient induction criterion due to which inappropriate elements hold majority in admitted population of an institution. In this paper, the case of a business education institute, which has been facing a similar problem, is discussed. The authors construct various propositions concerning the relevant ‘concepts of interest’ and then gauge their truth value through a survey of archival records of admitted students with an intent of establishing a cause-and-effect relationship between admission policy and the students’ academic performance.