Grades as Incentives: A Quantitative Assessment with Implications for Study Abroad Programs

Abstract

The problem under investigation is to examine if grades motivate students and, if so, by how much. This article uses a unique data set of 436 students enrolled in an American university located in Europe composed of approximately 50% study-abroad students and 50% degree-seeking students to examine whether there is a significant difference in semester grade point average (GPA) outcomes between students whose grades are averaged into their cumulative GPA with those who take courses on a pass/fail basis. Using linear regression models controlling for academic ability as well as other relevant variables, the study finds that students whose grades are averaged into their cumulative GPA are estimated to have an increase in the mean semester GPA of .36 points, or 11.4% above the average. For study-abroad students who take courses on a pass/fail basis, the results suggest that academic incentives are adversely affected by this grade transfer policy.