A Framework for Reconsidering the Lake Wobegon Effect

“A Framework for Reconsidering the Lake Wobegon Effect,” Journal of Economic Education 41 (1), 2010: 95 - 109.

32 Pages Posted: 20 Jan 2008 Last revised: 22 Jul 2018

See all articles by Marianne Johnson

Marianne Johnson

University of Wisconsin - Oshkosh - Department of Economics

M. Ryan Haley

University of Wisconsin - Oshkosh

M. Kevin McGee

University of Wisconsin - Oshkosh

Date Written: July 23, 2008

Abstract

The "Lake Wobegon Effect'' describes the potential bias introduced into survey-based analyses of education issues, because students systematically over-report academic achievements such as grade-point average. While the use of official-records data negates this effect, many researchers can only access student-reported data. In this paper we examine whether student-survey data in place of official-records data meaningfully biases regression estimates. We investigate this by capitalizing on a subtle but extremely useful statistical feature of over-reporting on bounded variables like grade-point average. Specifically, the misreports will be negatively correlated with the true grade-point average - a form of non-classical measurement error - which actually counteracts the bias. Around this insight we build a simple testing framework that permits a researcher with access to both data sets to assess the bias's size and significance. We demonstrate our method using two data sets, and find that the bias does not meaningfully impact the signs, significance, or magnitude of regression slope coefficients. Our results, and that the special econometric feature is likely present in all student-reported grade data, lead us to believe the Lake Wobegon Effect bias is inconsequential.

Keywords: Education Practice, Student Survey Data, Grade Bias, Measurement Error, Aptitude Data

JEL Classification: A22, C13, C52

Suggested Citation

Johnson, Marianne and Haley, M. Ryan and McGee, M. Kevin, A Framework for Reconsidering the Lake Wobegon Effect (July 23, 2008). “A Framework for Reconsidering the Lake Wobegon Effect,” Journal of Economic Education 41 (1), 2010: 95 - 109.. Available at SSRN: https://ssrn.com/abstract=1085335 or http://dx.doi.org/10.2139/ssrn.1085335

Marianne Johnson (Contact Author)

University of Wisconsin - Oshkosh - Department of Economics ( email )

800 Algoma Blvd.
Oshkosh, WI 54901
United States
920-424-2230 (Phone)
920-424-1734 (Fax)

M. Ryan Haley

University of Wisconsin - Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI WI 54901
United States

M. Kevin McGee

University of Wisconsin - Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI WI 54901
United States

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