Grade inflation

The media has noticed the problem of grade inflation in UK degrees (BBC, Telegraph). There are now twice as many first class degrees being given out as there were ten years ago (for non-UK readers, a “first” is the best degree grade).

The economics of this seems clear. A university that gives better grades to its students benefits them in the job market, and also looks better in league tables that count the number of grades students get. It also devalues that university’s degrees, but, since most UK employers cannot distinguish between universities except perhaps Oxbridge at the top, this devaluation is a “public bad” which is shared with all universities... and also with past and future students, neither of whom the short-term-focused administration cares about. Result: grade inflation.

This story is true as far as it goes, but it misses something important. Grades are given by the academic staff who do marking. None of us benefits directly from inflating our students’ grades. The benefit to the university is a public good for each individual academic: why should I care about my university’s score in the rankings?

The real cause of the change is not pure self-interest, but a combination of “bounded ethicality” and its exploitation. I feel loyal to my colleagues in my department, and to my university; whereas UK education as a whole is too abstract and remote to care about. And then, these feelings are played on by the administration. A memo comes round about “using the top end of the grading system more” so as “not to short-change our students”. Your colleagues knuckle under – after all, everyone else is doing it. If you rock the boat or grade too low, then you are told not to make trouble. In this way, a new norm is developed. We shift our ideas about what constitutes first class work, just a little at first....

This is typical. Selfishness is not just about the breakdown of norms; new norms are also created. As Thucydides put it:

Words had to change their ordinary meaning and to take that which
was now given them. Reckless audacity came to be considered the courage of a loyal ally; prudent hesitation, specious cowardice; moderation was held to be a cloak for unmanliness; ability to see all sides of a question, inaptness to act on any.... (3.82)

The promising side of this is that, in economists’ terms, there are multiple equilibria. Individuals will always be tempted by selfishness; but an organization can only act selfishly if the individuals in the organization tolerate this. When the greater society has a strong claim on people’s affections, it is possible to resist organizational selfishness. Let’s hope that UK academics recognize this, and try harder to uphold our standards in future.