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Optimal grading

Author

Listed:
  • Robertas Zubrickas

Abstract

Assuming that teachers are concerned with human capital formation and students - with ability signaling, in this paper we model a teacher-student relationship as an agency problem with conflicting interests. In our model, the teacher elicits effort from the student rewarding for it with a grade, the utility of which to the student is an ability signal inferred by the job market. In the event that the job market does not observe individual teachers' grading practice, teachers find grades as costless rewards and optimally choose to be lenient in grading. As a result, 'the problem of the commons' of good grades emerges leading to the depreciation of grading standards and grade inflation. The prediction of the model that the lower the expectations the teacher holds about her students' abilities, the flatter the grading rules she sets up is empirically supported.

Suggested Citation

  • Robertas Zubrickas, 2010. "Optimal grading," IEW - Working Papers 487, Institute for Empirical Research in Economics - University of Zurich.
    • Handle: RePEc:zur:iewwpx:487
    as

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    File URL: https://www.zora.uzh.ch/id/eprint/51746/1/iewwp487.pdf
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Make good grades costly to teachers
      by Economic Logician in Economic Logic on 2010-07-06 19:23:00
    2. Botemedel mot betygsinflation?
      by Niclas Berggren in Nonicoclolasos on 2010-07-07 14:27:06

    Citations

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    Cited by:

    1. Darren Grant & William Green, 2013. "Grades as incentives," Empirical Economics, Springer, vol. 44(3), pages 1563-1592, June.
    2. Michaelis, Jochen & Schwanebeck, Benjamin, 2016. "Examination rules and student effort," Economics Letters, Elsevier, vol. 145(C), pages 65-68.
    3. Alejandro Cid & José María Cabrera, 2012. "Joint-Liability vs. Individual Incentives in the Classroom. Lessons from a Field Experiment with Undergraduate Students," Documentos de Trabajo/Working Papers 1206, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
    4. Martin Gregor, 2021. "Electives Shopping, Grading Policies and Grading Competition," Economica, London School of Economics and Political Science, vol. 88(350), pages 364-398, April.
    5. Florian Birkenfeld & Shima'a Hanafy, 2008. "Was macht eine zentrale Abschlusspruefung aus?," Economics of Education Working Paper Series 0033, University of Zurich, Department of Business Administration (IBW).
    6. Maryam Saeedi & Ali Shourideh, 2020. "Optimal Rating Design under Moral Hazard," Papers 2008.09529, arXiv.org, revised Jul 2023.
    7. Adriani, Fabrizio & Sonderegger, Silvia, 2019. "A theory of esteem based peer pressure," Games and Economic Behavior, Elsevier, vol. 115(C), pages 314-335.

    More about this item

    Keywords

    Principal-agent model; teacher-student relationship; costless rewards; grading rules; mismatch of abilities and grades; grade inflation; teacher incentives;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • I20 - Health, Education, and Welfare - - Education - - - General

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    1. Economic Logic blog

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