An economic analysis of the use of student evaluations: implications for universities

In this paper, we develop an analytical model of joint maximizing behavior on the part of students and professors to develop policy rules for universities who use student evaluations as tools for increasing professor effort and, thereby, student knowledge. More precisely, we examine the potential benefits of student evaluations, the consequences of over-emphasizing them and the optimal level of emphasis that should be placed on them. This exercise allows us to determine conditions under which student evaluations would result in an increase in teaching effort and student knowledge, and environments where it would result in professors manipulating grading schemes to obtain higher student ratings, i.e., grade inflation.