Can fighting grade inflation help the bottom line?

Arthur Caplan and John Gilbert

Applied Economics Letters, 2010, vol. 17, issue 17, 1663-1667

Abstract: This article uses a rich set of student transcript data to estimate the economic cost incurred by a university when it does not adopt a 'mean-shift grading policy' to fight grade inflation. We show that even in the face of moral hazard constraints a university can enhance its profitability by fighting grade inflation with a distribution-shifting policy.

Date: 2010
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DOI: 10.1080/13504850903251231

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