Grades across universities over time GERAINT JOHNES* KWOK TONG SOO† Lancaster University Lancaster University June 2015 Abstract This paper examines the determinants of degree outcomes in a sample of UK universities from 2004 to 2012. We use stochastic frontier methods to account for differences in efficiency across universities and over time. The quality of the student intake and the university’s research performance are the main determinants of degree outcomes. There is no evidence of grade inflation at the boundary between upper and lower second class honours. Decomposing the determinants of degree outcomes, we find that good entry grades yield a higher return in traditional universities than in new universities. Although high quality universities award more good degrees, we find little evidence that universities of different quality differ in their propensity to inflate grades over time. JEL Classification: I21, I23. Keywords: Degree outcomes; UK universities; stochastic frontier analysis; Blinder-Oaxaca decomposition. * Department of Economics, Lancaster University Management School, Lancaster LA1 4YX, United Kingdom. Tel: +44(0)1524 594215. Email:
[email protected] † Department of Economics, Lancaster University Management School, Lancaster LA1 4YX, United Kingdom. Tel: +44(0)1524 594418. Email:
[email protected] 1 1 INTRODUCTION “Everyone at this graduation is first in his class. What a grand and glorious accomplishment! The diplomas are all here and since every one of you is first in his class, you can simply come up and get them in any old order you please”. Lao She, Cat Country. In any sphere of activity where standards are set, assessors face the challenge of ensuring the constancy of the level of performance that is required to meet the given standard.