1. ^aStetson School of Business and Economics, Mercer University, 1400 Coleman Avenue, Macon, GA 31207, USA. E-mail: dills_ak@mercer.edu
2. ^bDepartment of Economics, Metropolitan State, College of Denver, Campus Box 77, P.O. Box 173362, Denver, CO 80217-3362, USA. E-mail: rherna42@mscd.edu

Abstract

We examine how students who transfer credit for an introductory-level course from schools of varying quality perform in a subsequent intermediate-level course, holding constant many student characteristics. We measure college quality by the percent of students admitted, the student faculty ratio, listed tuition, the percentage of professors with Ph.D.s, and SAT scores. Students taking introductory courses at higher quality institutions earn higher grades in their intermediate courses than students transferring from lower quality institutions. A back-of-the-envelope calculation suggests that, for the average student, the benefit from attending a higher quality institution is more than worth the higher tuition.