Compensation of accounting faculty is positively related to the quantity and quality of research output, as well as the reputation of the school from which the individual graduated and at which she/he is employed, say Sharad Asthana of University of Texas, and Steven Balsam of Temple University in ‘Market for accounting faculty,’ a recent paper in www.ssrn.com.

While compensation is positively related to faculty rank, it is inversely related to the length of time spent at his/her current institution, the authors note. “This penalty, if you would call it, to loyalty, may be a function of the faculty member’s unwillingness to relocate or may proxy for an omitted variable that is correlated with the faculty member’s market value,” they reason. An interesting insight in the paper is that teaching quality (or at least popularity) is positively associated with compensation as well.

Publication tiers

The study – which covers 949 unique accounting faculty representing 82 schools across 18 states and two countries, viz. the US and Canada – estimates that a tier 1 accounting publication increases annual salary by $3,935, tier 1 non-accounting publication increases annual salary by $3,284, a tier 2 accounting publication increases annual salary by $2,195, and a tier 3 publication increases salary by $274.

One learns that these increases vary by rank; the increase associated with a top tier accounting publication for a full professor is $2,590, while the corresponding increase for an assistant professor is $9,236. And, each additional citation is associated with a $105 increase in annual compensation, the paper informs. “Considering that these are annual increases in base salary, under reasonable assumptions about longevity and discount rates, the present value of a top tier publication to an assistant professor easily exceeds $100, 000,” the authors observe.

Teacher ratings

As for teaching performance, the study uses ratings available on RateMyProfessor.com for 606 faculty members in the sample. “One of the reasons we lose more than a third of our sample, is that postings to RateMyProfessor.com are voluntary,” the authors clarify. “Consequently, only a small percentage of students ever post to RateMyProfessor.com and those that do, we expect, are disproportionately at the tail of the distribution, either very happy or very unhappy with the faculty. Another issue with RateMyProfessor.com ratings is that they are associated with the perceived attractiveness and easiness of the instructor (see Felton et al. 2004, Felton et al. 2008).”

Educative work for the academia in disciplines other than accounting, too.

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