In this article, the authors illustrate how incentives can improve student performance in introductory economics courses. They implemented a policy experiment in a large introductory economics class in which they reminded students who scored below an announced cutoff score on the midterm exam about the risk of failing the course. The authors employed a regression-discontinuity method to estimate the causal impact of their policy on students performance on the final exam. The results suggest that the policy had a significant impact on students performance on the final exam. In fact, the gain in test scores was sufficient to boost a student's overall course grade by one letter grade.
- Introductory economics
- Regression-discontinuity design