Real Costs of Nominal Grade Inflation? New Evidence from Student Course Evaluations
College GPAs in the United States rose substantially between the 1960â€™s and the 2000â€™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 â€œAâ€ than in the same course taught by the same instructor in which students expected a â€œC.â€ Simultaneity suggests estimates are biased toward zero. Findings do not appear to be driven primarily by the individual studentâ€™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 choicesâ€”evidence that nominal changes in grades may lead to real changes in effort investment.
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