FORTUNE – Do B-School Rankings Really Matter?

Glenn Hubbard's – Do B-School Rankings Really Matter?While plenty of people apply to a school because it’s highly ranked, your needs should trump the seal of approval of any publication.

As a business school dean, I am frequently asked about rankings. Alumni wonder whether their degrees have lost—or gained—value because of rankings, and aspiring applicants fret about which rankings to trust. After all, there are many out there, each with a different formula, and each with a different school at the top. This puts prospective applicants in a position of consulting advisors who rarely agree. Given the element of subjectivity involved, it’s tempting to throw your hands in the air, as many academic leaders do, and conclude that rankings simply do not matter.

But those people are wrong. Rankings do matter, though perhaps not in the way that many would expect.

The basic question is this: how do you measure the quality of a business school? It isn’t necessarily in the number of prizes your faculty has won or how many of your alumni are CEOs. (Even a pre-teen can call himself a CEO, as I was reminded by the latest TechDay New York, which Columbia co-sponsored, bringing together the city’s startup community.) And every business school dean, myself included, will tell you that their school is the best, so as much as it pains me to say, you should probably look past the deans.

Instead, look to the students. It’s in the student network that you will find the metrics that matter for assessing any business school: inputs and outputs. (Sorry for the econspeak, but I am an economist!)

By inputs I mean applications. It’s valuable to know how many applications a given business school receives during a year. It’s also valuable to know whether the volume of applications is trending up or down over the long term. It stands to reason that the marketplace of prospective students will send the most applications to the best schools, which will, in turn, have more selective admission rates. If you study the data on applications—which some rankings provide as part of their research—you will have a key piece of the puzzle.

It’s just as important, however, to know what happens to students when they leave school—the outputs. If the job market deems the students to have received a valuable education, they will receive good job offers. That should hardly come as a surprise—employers want the best employees they can get. Schools that routinely graduate classes at full or near-full employment, with good job satisfaction, have reason to believe they’re receiving a vote of confidence from the market. Rankings that provide data on job offers, salary levels, and other “value added” criteria are providing another critical piece of the puzzle.

Put these pieces together, then, and the picture that emerges might be shocking to some. There are, in fact, top business schools—consistently so—and there is a quantitative way to differentiate them from the rest. The handful of business schools that dominate the upper tiers of today’s rankings no doubt see the input and output numbers you would expect. And because they do, they enjoy the cascading effects of being a top business school, like the programmatic adaptability that comes with financial health, and the ability to build or maintain an extraordinary faculty.

So all rankings of business schools, at least in part, reflect an on-the-ground reality—if they are taking into consideration the inputs and outputs that are key data points. Admittedly, the aggregate difference between schools in the top five or 10 can be slight. However, being ranked #1 versus #10 can significantly impact the perspective of the marketplace. It’s up to each school and each prospective applicant to discern the signal from the noise and act accordingly.

That means that, while rankings matter, if you are thinking about applying to business school, the question is whether the rankings matter for you.

Plenty of people apply to a school because it has reached the summit of a “best-of” ranking, just as many people will see a movie or buy a book after it wins an award. That’s human nature. We want to experience the best. But if you are looking for a particular type of career—as an entrepreneur or a leader in social enterprise, for example—or you know that location will be important for your future job prospects, some schools will meet your needs better than others. In which case, your needs should trump the seal of approval of any publication. You owe it to yourself to do your homework on a school’s academic curriculum, career management efforts, alumni network, and ability to put you in front of leaders who are shaping business today.

In the end, though, finding the top business school for you doesn’t have to be a guessing game. The information needed to identify the best schools is out there, and if you ask this dean, that’s the real business of business school rankings.

By Glenn Hubbard. This op-ed appeared in on April 6, 2015.