Whether you are buying into a bubble depends on whether the cost of what you are buying significantly exceeds its intrinsic value. For most assets, you can find the intrinsic value by looking at the expected return – the more money the asset puts in your pocket, the more valuable it is. This works well for stocks and bonds but not quite as well for education, and rather poorly when that education is from a top business school which offers some very attractive non-monetary benefits:
- Personal branding derived from the brand name of your MBA school will stand by you for life. “Oh, you’re a Harvard graduate, good man, let me open some doors for you!”
- Social status derived from the prestige of your school may be a particular boon if you are a man. A first year psychology student once told me that women look for just two things in men (1) status and (2) resources. (Given the cost of attending a top business school you had better work that social status to your advantage.)
- Networking with smart, well-connected, ambitious and successful business school students will help you discover new ideas and unforeseen opportunities.
- Positive emotions are contagious and by associating with the happy and fortunate people whom you find at business school you may be able to achieve more than you ever thought possible.