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Failing Students Optimally


  • Arthur Caplan


This paper estimates the deadweight loss associated with not failing an optimal number of students. We find that this loss ranges between $3,200 and $4,600 per student over the student's four-year undergraduate career. One possible ramification of adopting a more stringent student-failure policy (to recoup the deadweight loss) is investigated. We find that an institution can promote greater effort on the part of both students and faculty by encouraging faculty to fail more students.

Suggested Citation

  • Arthur Caplan, 2004. "Failing Students Optimally," Working Papers 2004-17, Utah State University, Department of Economics.
  • Handle: RePEc:usu:wpaper:2004-17

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    File Function: First version, 2004
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    More about this item


    optimal fail rate; student-failure policy; deadweight loss;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • I20 - Health, Education, and Welfare - - Education - - - General


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