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The Simple Economics of Thresholds: Grades as Incentives

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  • Darren Grant

    ()
    (Department of Economics and International Business, Sam Houston State University)

  • William B. Green

    ()
    (Department of Economics and International Business, Sam Houston State University)

Abstract

This paper examines how grade incentives affect student learning across a variety of courses at two universities, using for identification the discrete rewards offered by the standard A-F letter grade system. We develop five predictions about effort provision in the presence of the thresholds that separate these discrete rewards, only one of which has been previously tested in the economics literature generally. Surprisingly, all are rejected in our data. Either these grade incentives do not influence student effort appreciably on the margin, or the additional effort is ineffective.

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Bibliographic Info

Paper provided by Sam Houston State University, Department of Economics and International Business in its series Working Papers with number 0901.

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Date of creation: Jan 2009
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Handle: RePEc:shs:wpaper:0901

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  1. Gerald Marschke & Pascal Courty, 2002. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives," Discussion Papers 02-06, University at Albany, SUNY, Department of Economics.
  2. Gerald S. Oettinger, 2002. "The Effect Of Nonlinear Incentives On Performance: Evidence From "Econ 101"," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 509-517, August.
  3. Todd R. Stinebrickner & Ralph Stinebrickner, 2007. "The Causal Effect of Studying on Academic Performance," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20072, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  4. Muradian, Roldan, 2001. "Ecological thresholds: a survey," Ecological Economics, Elsevier, vol. 38(1), pages 7-24, July.
  5. Darren Grant, 2007. "Dead on Arrival: Zero Tolerance Laws Don’t Work," Working Papers 0708, Sam Houston State University, Department of Economics and International Business.
  6. Richard Borghesi, 2008. "Widespread Corruption in Sports Gambling: Fact Or Fiction," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 1063-1069, April.
  7. Joseph G. Altonji & Prashant Bharadwaj & Fabian Lange, 2008. "Changes in the Characteristics of American Youth: Implications for Adult Outcomes," NBER Working Papers 13883, National Bureau of Economic Research, Inc.
  8. Charles Perrings & David Pearce, 1994. "Threshold effects and incentives for the conservation of biodiversity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(1), pages 13-28, February.
  9. Reback, Randall, 2008. "Teaching to the rating: School accountability and the distribution of student achievement," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1394-1415, June.
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