GMAT Testing Volume: A Deeper Look into the Numbers

Last week Poets & Quants ran an article announcing robust growth in GMAT testing volume from Testing Year 2011 to 2012. A total of 286,529 exams were taken in Testing Year 2012, representing the highest total ever, and 11% growth vs. the previous year. (GMAC’s testing years run from July 1 to June 30 each year.) While testing volume in the United States is still down about 10% vs. Testing Year 2009, strong growth in East and Southeast Asia helped drive total testing volume to its highest level ever.

Sounds like the GMAT and the graduate management education market are firing on all cylinders, right? While we agree that reports of the death of business schools have been greatly exaggerated, there is a huge part of the story here that everyone is missing, one that will almost certainly bubble up once we see Testing Year 2013 numbers from GMAC later this year.

What’s missing? The effect of the big change on June 5, 2012, when Integrated Reasoning was added to the GMAT. While GMAC does not break out month-by-month data, and the organization has not shared a lot of specifics around the surge that came from students trying to take the test before June 5, but everyone in the GMAT preparation industry knows it happened. The net effect was that thousands of students took the test a couple of months earlier (or even a year earlier) than they otherwise would have, pulling forward some of the volume that would have naturally happened in TY 2013 into TY 2012.

GMAT Testing Volume

From the 2012 GMAT World Geographic Trend Report

As we’ve written before, this is likely going to lead to a drop in testing volume in the current year. We’re actually a little surprised that GMAC hasn’t gotten out in front of this a little more now, since the organization will likely have some explaining to do when the TY 2013 numbers come out late this year. Of course, perhaps underlying testing volume is so strong that GMAC won’t need to do that, although we think the chance of that happening is low.

Ultimately, if you’re studying for the GMAT now, none of this matters to you. Focus on making yourself a stronger GMAT student and MBA applicant, rather than hoping that a few thousand extra people decide not to apply to business school this year.

But, there is a GMAT lesson to be learned here: Just as we often teach with Critical Reasoning and Data Sufficiency questions, it’s easy to look at one set of numbers and draw one conclusion, when there is actually another piece of information that can dramatically impact what conclusion you can draw. In this case, GMAT volume does indeed seem to be healthy overall, but looking at year-over-year GMAT volume growth without considering the June 5 change can lead to some faulty conclusions!

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