Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 20

Time-Series Regression; Applicants for MBA Programs Business schools have commonly observed that when job opportunities are down, those interested in business seek to enter MBA programs. To test this hypothesis, we decided to look at the number of applicants for MBA programs and to compare that to the unemployment rate. The applications data are from the Graduate Management Admissions Council (www.gmac.com/gmac) while the unemployment data are taken from the website of the U.S. Bureau of Labor Statistics (www.bls.gov/data/home.htm). We have data for both the total unemployment rate and the rate for college graduates 25 years of age or older. The data for 2000 through 2013 are shown below.

Required Use regression analysis on the above data to determine whether there is a relationship between the unemployment rate and the number of applicants to MBA programs. Use both measures of unemployment and see if there is a difference in your results. State whether you expect the relationship to be positive or negative (inverse).