Scandinavian Working Papers in Economics

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2010/5: Grading standards, student ability and errors in college admission

Jarle Møen () and Martin Tjelta ()
Additional contact information
Jarle Møen: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Finance and Management Science, Helleveien 30, N-5045 Bergen, Norway
Martin Tjelta: Finance and Management Department, University of Stavanger, Postal: University of Stavanger, Finance and Management Department, N-4036 Stavanger, Norway

Abstract: Grades are important for admission of students in most higher education programmes. Analysing admission and student performance data at a major Norwegian business school, we find that the grading practice of teachers at regional colleges sending students to the school is affected by the average performance of the students being graded. Teachers at colleges recruiting good students from upper secondary school tend to be strict in their grading practice, while teachers at colleges recruiting less good students tend to follow a lenient practice. This has implications for the interpretation of grades and hence for optimal admission procedures. We develop a methodology to assess the consequences of differential grading standards. Approximately ten percent of the students in our data are admitted at the expense of more competent students. We demonstrate costs for the school admitting wrong students and in particular for the rejected students.

Keywords: Grading practices; Differential grading standards; Admission policy

JEL-codes: A20; I21

19 pages, June 29, 2010

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