Grading and Moral Hazard

A modest proposal for the elimination of grade inflation.

As political pressures for equity—equality of outcome—have grown in recent years, traditional methods of evaluating college students have come under threat. As the proportion of the population going to college has increased, the proportion of students who are not equipped to succeed has also increased.

Dealing with an increasing number of marginal students in an equity-charged environment is one factor that has favored grade inflation. But there is a contributing factor that is built into the American system and has taken some years to reach fruition. When I first came to this country from Britain, I was surprised to find that students were graded by the individual who taught them. This obviously introduces a conflict of interest, especially for teachers of elective courses. Harsh grades mean a drop in enrollment. A drop in enrollment means a loss of salary for the tenured, or of a job for adjunct faculty. Given the incentives, I am surprised that grade inflation has taken so long to become a problem.

The U.S. system allows for spontaneity but also for corruption; how might it be fixed?The contrast with British practice was stark. At that time (the 1960s), pupils’ futures were decided by two sets of high-stakes exams: Ordinary Level, taken at 16, and Advanced Level, at 18 or so. After O-level, a good pass meant you could go on to A-level two years later and then, possibly, to college (maybe five percent or so of each cohort made it to college in those days, so the process was very selective).

These vital examinations took place in a separate location, “examination halls” (mine was in South Kensington in central London). Students, identified not by name but by a number, from schools all over the city, sat at widely separated tables patrolled by a gowned “invigilator.” The whole thing was completely anonymous; the student didn’t even know who was grading his exam, which was done by a system-wide committee that might include his teacher but most likely did not.

This system is totally fair, but it’s also rather rigid, because all must teach from the same syllabus. Teachers have little room for spontaneity.

The U.S. system allows for spontaneity but also for corruption; how might it be fixed? Years ago at Duke, when the issue first came up, I suggested a simple method to limit grade inflation. Suppose that the average grade is set to be, say, “5.” Each instructor is given grade points equal to five times the number of students in the class and can allocate the points in any way she prefers. If the class is poor, she need not allocate all the points. If the class is exceptional, she can petition for extra points. For the most part, however, she must allot grades with reference to her total point limit. A perfect or near-perfect score for everyone is simply not possible.

I would have been happy with such an arrangement, but, at that time, the proposal went nowhere.

John Staddon is James B. Duke Professor of Psychology and Professor of Biology Emeritus at Duke University. He was profiled in the Wall Street Journal in January 2021 as a commentator on the current problems of science. His book Science in an Age of Unreason (Regnery) came out in 2022.