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Implications of grade inflation: knowledge illusion and economic inefficiency in the knowledge market

Author

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  • Tin-chun Lin

    () (Indiana University - Northwest)

Abstract

In this paper, we adopt the neoclassical model of consumer choice and view students as a utility maximizer to investigate two implied issues caused by grade inflation – knowledge illusion and economic inefficiency in the knowledge market. These issues are important because they negatively impact the quality of higher education and weaken the signaling role of educational credentials in screening workers. More importantly, students eventually suffer a loss in well-being in the knowledge market and become less productive and competitive in the labor market.

Suggested Citation

  • Tin-chun Lin, 2009. "Implications of grade inflation: knowledge illusion and economic inefficiency in the knowledge market," Economics Bulletin, AccessEcon, vol. 29(3), pages 2314-2324.
  • Handle: RePEc:ebl:ecbull:eb-09-00501
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P76.pdf
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    References listed on IDEAS

    as
    1. Krautmann, Anthony C. & Sander, William, 1999. "Grades and student evaluations of teachers," Economics of Education Review, Elsevier, vol. 18(1), pages 59-63, February.
    2. Paul W. Grimes & Meghan J. Millea & Thomas W. Woodruff, 2004. "Grades—Who's to Blame? Student Evaluation of Teaching and Locus of Control," The Journal of Economic Education, Taylor & Francis Journals, vol. 35(2), pages 129-147, April.
    3. Paul Isely & Harinder Singh, 2005. "Do Higher Grades Lead to Favorable Student Evaluations?," The Journal of Economic Education, Taylor & Francis Journals, vol. 36(1), pages 29-42, January.
    4. Tin-chun Lin, 2009. "Endogenous effects of midterm grades and evaluations: a simultaneous framework," Economics Bulletin, AccessEcon, vol. 29(3), pages 1731-1742.
    5. William E. Becker & William Bosshardt & Michael Watts, 2012. "How Departments of Economics Evaluate Teaching," The Journal of Economic Education, Taylor & Francis Journals, vol. 43(3), pages 325-333, July.
    6. Tin-chun Lin, 2009. "Application of a static game of complete information: economic behaviors of professors and students," Economics Bulletin, AccessEcon, vol. 29(3), pages 1678-1686.
    7. Michael A. McPherson, 2006. "Determinants of How Students Evaluate Teachers," The Journal of Economic Education, Taylor & Francis Journals, vol. 37(1), pages 3-20, January.
    8. Mason, Paul M. & Steagall, Jeffrey W. & Fabritius, Michael M., 1995. "Student evaluations of faculty: A new procedure for using aggregate measures of performance," Economics of Education Review, Elsevier, vol. 14(4), pages 403-416, December.
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    More about this item

    Keywords

    grade inflation; knowledge illusion; economic inefficiency;

    JEL classification:

    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • D0 - Microeconomics - - General

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