Centre for Economic and Regional Studies Hungarian Academy of Sciences Centre of Excellence

Abstract

At many universities, student evaluations of teaching (SET) are used for determining promotion, tenure, and other financial benefits for professors, which gives incentive for them to try to increase their scores. However, previous research, mainly based on US data, indicates that SET scores not only depend on teaching effectiveness and quality, but also on several other factors, most notably on grades. In this study, we contribute to this stream of literature by investigating the effects of grade inflation on SET scores using four years of data from two leading Central European universities. The SET survey is filled out at these universities after the final grades are known. As a methodological novelty, we use weighted regression methods (ordinary least squares, two-stage least squares, fixed effects panel) to account for the differences in class size. The weighting reflects the importance of the average SET score of a class on the evaluation of the instructor. Our findings suggest that increasing the grade of a student by one will cause them to give approximately 0.2–0.4 higher evaluations for the instructor in the SET survey.