How to Compare Faculty Pay Across the Business School

Abstract

By scaling pay by AACSB averages pay across business school disciplines can be analyzed. This study looks at a unique data set of business school professors at the University of Louisiana at Lafayette. It finds large disparities in pay between the business disciplines that cannot be explained by the market price of scholars in the disciplines, research productivity, or faculty to major ratios. The finance professors were the lowest paid of six disciplines as a percent of AACSB pay, but had the highest research productivity and majors per research faculty member at the Moody College of Business Administration (MCOBA). Finance professors were paid about 20 percent less as a percent of the AACSB average for their rank and discipline than other research faculty at the MCOBA. Members of the management department were paid significantly higher percent of AACSB average pay than other professors in the business school. This data may be indicative of a misallocation of resources. The approach in this paper could be applied to analyze pay practices at many other business schools and over many other time periods.

Keywords: AACSB, academic research, accounting, accreditation, B.I. Moody III College of Business, business schools, faculty compensation, faculty pay, finance, higher education, inequity, inversion, management, marketing, MBA programs, quantitative methods, pay, peer-review, research, Louisiana, Lafayette

JEL Classification: A22, A23, G0, H75, I23, J24, J31, J44, M0, M52