The Effects of Class Size on Student Grades at a Public University
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Kokkelenberg, Edward C.; Dillon, Michael; Christy, Sean M.
[Excerpt] We model how class size affects the grade that higher education undergraduate students earn and test the model using an ordinal logit with and without fixed effects on over 670,000 observations from a public university. We find that class size negatively affects grades for several specifications and subsets of the data, as well as for the whole data set. The specifications tested hold constant for academic department, peer effects, student ability, level of student, level of course, gender, minority status, etc. Average grade point declines as class size increases, precipitously up to class sizes of twenty, and gradually but monotonically through larger class sizes. The associated elasticity of Grade-Class Size is estimated to be -0.066 and this is the largest absolute value for variables controllable by the university. We conclude that there are dis-economies of scale associated with a deterioration of student outcomes as class sizes grow larger. The cost of this deterioration is not easily quantifiable as much of the costs are non-market costs and unobservable. Future studies of economies of scale in higher education need to address the traditional assumption of constant product quality.
economies of scale; educational economics; student performance; logit analysis; fixed effects models
Required Publisher Statement: Published by the Cornell Higher Education Research Institute, Cornell University.