Grade inflation at New Zealand universities has been in the news recently. This is a delayed reaction to this report from the New Zealand Initiative released back in August, authored by James Kierstead. He collected data on grade distributions from all eight New Zealand universities (via Official Information Act requests), and looks at how those distributions have changed over time. The results are a clear demonstration of grade inflation, and most clearly demonstrated in Figure 2.1 from the report:
Over the period from the mid-2000s to 2024, the proportion of New Zealand university students receiving a grade in the A range has increased at every New Zealand university, and by more than ten percentage points overall. Kierstead notes that:
Overall, the median proportion of A-grades grew by 13 percentage points, from 22% to 35%... The largest increases occurred at Lincoln, where the proportion of As grew by 24 percentage points between 2010 and 2024 (from 15% to 39%), more than doubling, and Massey, where they grew by 17 percentage points (from 19% to 36%) from 2006 to 2023.
A similar pattern of increases, although not as striking, is seen for pass rates, which in 2024 were above 90 percent at every university except Auckland. The results are also apparent across different disciplines, as shown in Figure 2.4 from the report:
Of course, this sort of grade inflation is common across other countries as well, and Kierstead provides a comparison that shows that New Zealand grade inflation is not dissimilar from grade inflation in the US, UK, Australia, and Canada.
Kierstead then turns his attention to why there has been grade inflation. He first dismisses some possible explanations such as better incoming students (NCEA results have not improved, although even if they had that might be due to grade inflation as well), more female students (the proportion of female students has been flat over the past ten years, while grades have continued to increase), better funding (bwahahahaha - in fact, funding per student has declined in real terms since 2019, while grades have continued to increase), and student-staff ratios (which have declined over time, but the student-academic ratio, which is the one that should matter most, has barely changed).
So, what has caused grade inflation? Kierstead describes it as a collective action problem, akin to the tragedy of the commons first described by Garret Hardin in 1968:
It is our contention that grade inflation is the product of a dynamic that is not dissimilar to the tragedy of the commons. Just like Hardin’s villagers, academics pursue a good (in this case high student numbers) in a rational way (in this case by awarding more high grades). And just as with Hardin’s villagers, negative consequences ensue, with a common resource (sound grading) being depleted, to the cost of every individual academic as well as others...
In the grade inflation game, the good that academics want to maximize is student numbers. Individual academics, on the whole, want to have as many students in their courses as possible. This suggests that they are popular teachers and can help get them promoted (and hence gain more money and prestige). It can also help make sure the courses they want to teach stay on the menu.
I like this general framing of the problem, where 'sound grading' is a common resource - a good that is rival and non-excludable. However, I would change it slightly, by thinking about the common resource as being A grades generally, which are depleted when the credibility of those grades reduces. In my slightly different framing, awarding A grades is rival in the sense that one person awarding more A grades reduces the credibility of A grades awarded by others. Awarding A grades is non-excludable in the sense that if anyone can award A grades, everyone can award A grades (while it is possible to prevent academics from awarding A grades, universities would probably prefer not to do so because that would reduce student satisfaction). So, while the social incentive for all academics collectively is to reduce the award of A grades to keep the credibility of those grades high, the private incentive for each academic individually is to increase the proportion of A grades awarded, leading to fame and fortune (or, more likely, leading to fewer awkward conversations with their Head of School as to why their grade distribution is too low, as well as better student evaluations - see here and here, for example). Essentially then, the incentives are for academics to inflate grades. The universities have few incentives to act to reduce grade inflation, since higher grades increase student satisfaction and lead to greater enrolments.
However, there is a problem. As Kierstead notes, grade inflation is well-termed because its effects are similar to the inflation that economists are more familiar with:
If universities hand out more and more As in a way that isn’t justified by student performance, the value of an A will go down. The same job opportunities will ‘cost’ more As as As flood the market. Students who worked hard will see the value of their As decrease over time, just as workers in the economy see their savings decrease in value due to monetary inflation.
So, what to do? Kierstead offers a few solutions in the report, including moderation of grades, reporting grades differently on transcripts, calculating grades differently, making post-hoc adjustments to grade point averages, having national standardised exams by discipline, changing the way that universities are funded to reduce the incentive to inflate grades, changing the culture of academics, and giving out prizes for 'sound grading'. I'm not going to dig into those different solutions, because sometimes the simplest one is the best one. With that in mind, I pick this:
Perhaps the simplest addition that could be made to student transcripts alongside letter grades is the rank that students achieved out of the total number of students on the course. So a student’s transcript might read, for example, ‘Classics 106: Ancient Civilizations: A- (27th of 252).’...
Adding ranking information restores some of the signalling value of grades without needing to reverse grade inflation itself. To see why, consider an example. If an employer has the transcripts of two students, one of whom got an A- grade in econometrics and ranked 17th out of 22 students, while the other student got a B grade and ranked 3rd out of 29 students, it's pretty clear that the grade might not be capturing the full picture of the students' relative merit. Kierstead worries about this simple solution because:
A limitation of rank-ordering is that it might suggest that students who achieved only a lowly ranking had performed badly, whereas they might well have performed very well in an especially difficult course.
Possibly, but the key point is not how well students did in the course, but how well they did relative to the other students in the class, which is exactly what the ranking provides. The benefit of this approach is that providing a ranking alongside the grade would reduce the incentives for students to cherry pick easy papers that award high grades, because a high grade on its own would not necessarily lead to a good ranking within the class.
Of course, there are potential problems with the simple solution. One such problem is that comparisons across different cohorts of students might not be fair. Taking the example of the two students I gave earlier, perhaps the student who got an A- grade and ranked 17/22 completed the paper in a cohort that was particularly smart, while the student who got a B grade and ranked 3/29 completed the paper in a cohort that was less smart. In that case, the grade without the ranking might be a better measure.
Kierstead's more complex solutions don't really deal well with the problem of between-cohort comparisons, and suffer from being more complicated for non-specialists to understand. A simple ranking, or a percentile ranking, is relatively easy for HR managers to interpret. Having said that, the between-cohort comparisons issue might not be too much of a problem in any case. My experience though, is for classes of a sufficiently large size (30 or more), the grade distributions do not differ materially (and if they do, it is usually because of the teaching or the assessment, not the students).
I can see some incentive issues though. Would students start to choose papers that they suspect that many weak students complete? Good students might anticipate that this would lead to a higher grade and a better ranking, which will look better on their transcript. On the other hand, is that really any worse than what students are doing now, if they choose papers that give out easy grades?
There are also potential issues with stigmatising students who end up near the bottom of a large class (how dispiriting would it be to have your transcript say you got a grade of E, and ranked 317th out of 319 students?). Of course, that could be solved to some extent by only providing ranking information for students with passing grades. And consideration would also be needed for how to deal with very small classes (is a ranking of 4th out of 5 students meaningful?).
Grade inflation is clearly a problem. It's not just nostalgia to say that an A grade is not what it used to be. Grade inflation has real consequences for employers, because the signalling value of high grades is reduced (see here for more on signalling in education). This means that there are also real consequences for high-quality students, who find it more difficult to differentiate themselves from average students. Solving this problem shouldn't involve government intervention to change university funding formulas, or trying to change academic culture. It shouldn't involve complicated statistical manipulations of grades. It really could be as simple as reporting students' within-class ranking on their academic transcripts.
The question now is whether any university would take it on themselves to do so. The credibility of university grades depends on it.
[HT: Josh McNamara, earlier in the year]
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