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Real Costs Of Nominal Grade Inflation? New Evidence From Student Course Evaluations

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  • PHILIP BABCOCK

Abstract

"College grade point averages in the United States rose substantially between the 1960s and the 2000s. Over the same period, study time declined by almost a half. This paper uses a 12-quarter panel of course evaluations from the University of California, San Diego to discern whether a link between grades and effort investment holds up in a micro setting. Results indicate that average study time would be about 50% lower in a class in which the average expected grade was an "A" than in the same course taught by the same instructor in which students expected a "C." Simultaneity suggests estimates are biased toward 0. Findings do not appear to be driven primarily by the individual student's expected grade, but by the average expected grade of others in the class. Class-specific characteristics that generate low expected grades appear to produce higher effort choices-evidence that nominal changes in grades may lead to real changes in effort investment." ("JEL" I21, J22, J24) Copyright (c) 2009 Western Economic Association International.

Suggested Citation

  • Philip Babcock, 2010. "Real Costs Of Nominal Grade Inflation? New Evidence From Student Course Evaluations," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 983-996, October.
  • Handle: RePEc:bla:ecinqu:v:48:y:2010:i:4:p:983-996
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    References listed on IDEAS

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    1. William Chan & Li Hao & Wing Suen, 2007. "A Signaling Theory Of Grade Inflation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 1065-1090, August.
    2. Betts, Julian R. & Grogger, Jeff, 2003. "The impact of grading standards on student achievement, educational attainment, and entry-level earnings," Economics of Education Review, Elsevier, vol. 22(4), pages 343-352, August.
    3. Bruce A. Weinberg & Belton M. Fleisher & Masanori Hashimoto, 2007. "Evaluating Methods for Evaluating Instruction: The Case of Higher Education," NBER Working Papers 12844, National Bureau of Economic Research, Inc.
    4. Figlio, David N. & Lucas, Maurice E., 2004. "Do high grading standards affect student performance?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1815-1834, August.
    5. Michael Ostrovsky & Michael Schwarz, 2003. "Equilibrium Information Disclosure: Grade Inflation and Unraveling," Harvard Institute of Economic Research Working Papers 1996, Harvard - Institute of Economic Research.
    6. Becker, William E, Jr, 1982. "The Educational Process and Student Achievement Given Uncertainty in Measurement," American Economic Review, American Economic Association, vol. 72(1), pages 229-236, March.
    7. Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-971, September.
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    Citations

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    Cited by:

    1. Pearce, John A., 2017. "How employers can stanch the hemorrhaging of collegiate GPA credibility," Business Horizons, Elsevier, vol. 60(1), pages 35-43.
    2. Darren Grant & William Green, 2013. "Grades as incentives," Empirical Economics, Springer, vol. 44(3), pages 1563-1592, June.
    3. Rebecca Summary & William Weber, 2012. "Grade inflation or productivity growth? An analysis of changing grade distributions at a regional university," Journal of Productivity Analysis, Springer, vol. 38(1), pages 95-107, August.
    4. John Bailey Jones & Fang Yang, 2016. "Skill-Biased Technical Change and the Cost of Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 621-662.
    5. Robert Schwager, 2018. "Majority Vote on Educational Standards," CESifo Working Paper Series 6845, CESifo Group Munich.
    6. repec:bla:manchs:v:85:y:2017:i:1:p:106-131 is not listed on IDEAS
    7. repec:got:cegedp:143 is not listed on IDEAS
    8. Steven Brint and Allison M. Cantwell, 2011. "ACADEMIC DISCIPLINES AND THE UNDERGRADUATE EXPERIENCE: Rethinking Bok’s “Underachieving Colleges†Thesis," University of California at Berkeley, Center for Studies in Higher Education qt83q89897, Center for Studies in Higher Education, UC Berkeley.
    9. Ehlers, Tim & Schwager, Robert, 2012. "Honest grading, grade inflation and reputation," Center for European, Governance and Economic Development Research Discussion Papers 143, University of Goettingen, Department of Economics.
    10. Beleche, Trinidad & Fairris, David & Marks, Mindy, 2012. "Do course evaluations truly reflect student learning? Evidence from an objectively graded post-test," Economics of Education Review, Elsevier, vol. 31(5), pages 709-719.
    11. Sam Allgood & William B. Walstad & John J. Siegfried, 2015. "Research on Teaching Economics to Undergraduates," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 285-325, June.
    12. Hernández-Julián, Rey & Looney, Adam, 2016. "Measuring inflation in grades: An application of price indexing to undergraduate grades," Economics of Education Review, Elsevier, vol. 55(C), pages 220-232.
    13. Apostolos Filippas & John Horton & Joseph M. Golden, 2017. "Reputation in the Long-Run," CESifo Working Paper Series 6750, CESifo Group Munich.
    14. Ehlers, Tim & Schwager, Robert, 2012. "Honest Grading, Grade Inflation and Reputation," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62051, Verein für Socialpolitik / German Economic Association.
    15. Shao-Hsun Keng, 2016. "The Effect of a Stricter Academic Dismissal Policy on Course Selection, Student Effort, and Grading Leniency," Education Finance and Policy, MIT Press, vol. 11(2), pages 203-224, Spring.
    16. De Witte, Kristof & Geys, Benny & Solondz, Catharina, 2014. "Public expenditures, educational outcomes and grade inflation: Theory and evidence from a policy intervention in the Netherlands," Economics of Education Review, Elsevier, vol. 40(C), pages 152-166.
    17. Lehr Brandon, 2016. "Information and Inflation: An Analysis of Grading Behavior," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 755-783, April.
    18. Armstrong, J. Scott, 2012. "Natural Learning in Higher Education," MPRA Paper 37648, University Library of Munich, Germany.
    19. Alexander Ludwig & Dirk Krueger, 2010. "Optimal Progressive Taxation and Education Subsidies in a Model of Endogenous Human Capital Formation," 2010 Meeting Papers 388, Society for Economic Dynamics.
    20. Cory Koedel, 2010. "Grading Standards in Education Departments at Universities," Working Papers 1002, Department of Economics, University of Missouri, revised 13 Jun 2011.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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