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School grading and institutional contexts


  • Valentino Dardanoni
  • Salvatore Modica
  • Aline Pennisi


We study how the relationship between students' cognitive ability and their school grades depends on institutional contexts. In a simple abstract model, we show that unless competence standards are set at above-school level or the variation of competence across schools is low, students' competence valuation will be heterogeneous, with weaker schools inflating grades or flattening their dependence on competence, therefore reducing the information content and comparability of school grades. Using data from the OECD-PISA 2003 Survey, the model is applied to a sample of four countries, namely Australia, Germany, Italy, and the Netherlands. We find that in Australia, schools' heterogeneity does not affect grading practices; in the other countries, grades are inflated in weaker schools, uniformly in Germany and the Netherlands, to a larger extent for weaker students in Italy.

Suggested Citation

  • Valentino Dardanoni & Salvatore Modica & Aline Pennisi, 2011. "School grading and institutional contexts," Education Economics, Taylor & Francis Journals, vol. 19(5), pages 475-486, January.
  • Handle: RePEc:taf:edecon:v:19:y:2011:i:5:p:475-486
    DOI: 10.1080/09645292.2010.488482

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