Quest for Knowledge and Pursuit of Grades: Information, Course Selection, and Grade Inflation
33 Pages Posted: 9 Oct 2007 Last revised: 29 Jun 2009
Date Written: August 2008
This paper exploits a unique natural experiment - Cornell University's 1996 decision to publish course median grades online - to examine the effect of grade information on course selection and grade inflation. We model students' course selection as dependent on their tastes, abilities, and expected grades. The model yields three testable hypotheses: (1) students will tend to be drawn to leniently graded courses once exposed to grade information; (2) the most talented students will be less drawn to leniently graded courses than their peers; (3) the change in students' behavior will contribute to grade inflation. Examining a large dataset that covers the period 1990-2004, our study provides evidence consistent with these predictions.
Keywords: information, course selection, grade inflation
JEL Classification: D83, I21, I23, L15
Suggested Citation: Suggested Citation