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Real Costs of Nominal Grade Inflation? New Evidence from Student Course Evaluations

  • Babcock, Phillip
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    College GPAs in the United States rose substantially between the 1960’s and the 2000’s. 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 zero. 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.

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    File URL: http://www.escholarship.org/uc/item/4823c3jx.pdf;origin=repeccitec
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    Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt4823c3jx.

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    Date of creation: 01 Mar 2009
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    Handle: RePEc:cdl:ucsbec:qt4823c3jx
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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, 08.
    2. Philip Babcock & Mindy Marks, 2011. "The Falling Time Cost of College: Evidence from Half a Century of Time Use Data," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 468-478, May.
    3. 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.
    4. 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.
    5. Stinebrickner Ralph & Stinebrickner Todd R., 2008. "The Causal Effect of Studying on Academic Performance," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-55, June.
    6. Julian R. Betts & Jeff Grogger, 2000. "The Impact of Grading Standards on Student Achievement, Educational Attainment, and Entry-Level Earnings," NBER Working Papers 7875, National Bureau of Economic Research, Inc.
    7. Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-71, September.
    8. 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 229-36, March.
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