Students score 8 percentage points higher when grades were framed as losses

The psychological discomfort associated with losing points could result in students being more attentive to their studies, thus sustainably enhancing both engagement and performance. The finding comes from a field experiment with 321 first-year business students in a required Macroeconomics for Business course at Corvinus University of Budapest. Researchers assigned class groups to three grading formats while keeping teaching content, tests and grade thresholds the same.  

Students in the standard gain group accumulated points for correct answers. Those in the loss group began with the maximum score and saw points deducted for mistakes. A hybrid group used gain framing during the semester and switched to loss framing for the final test. The final was a standardized multiple-choice exam taken by all groups at the same time.  

The clearest effect appeared on the final 

Students exposed to loss framing throughout the semester scored 9.6 percentage points higher than the gain group before adjustment for earlier test performance. After researchers controlled for semester performance, the gap was 7.8 percentage points and remained statistically significant. In a check excluding likely dropouts, the advantage remained at least 5.3 percentage points.  

“Our basic idea is to harness loss aversion. As has been documented in the literature, losing 10 euros, for example, tends to feel much more painful than the pleasure we derive from gaining the same amount. Applied to education, if students are more strongly motivated by the fear of losing points than by the prospect of earning them, then redesigning the grading system to emphasize potential losses could improve their performance,” says Antal Ertl, the leading author.  

The effect was smaller on tests taken during the semester, partly because of the way those assessments were structured. In a direct comparison of the loss and gain groups, loss framing was associated with a 2.6-percentage-point increase across students’ three best tests.  

The experiment also tested whether students would get used to the unusual grading system. During the semester, the loss group outperformed the hybrid group by about 11 percentage points while hybrid students were still receiving gain-framed feedback. On the final, when both groups faced loss framing, their performance converged. The researchers say the pattern shows the effect persisted even after the grading system became familiar.  

The researchers found no group that was harmed by the intervention 

For an intervention like this, one key question is whether it works differently for different groups of students, especially whether it leaves any group worse off. The researchers looked at differences by gender and by students’ prior math background. They found no statistically significant evidence that the intervention had different effects across these groups. The authors note, however, that the subgroup analyses were based on relatively limited statistical power, so smaller differences may have gone undetected. 

The researchers say the intervention is inexpensive because it changes how scores are presented while leaving course material and exams in place. They also call for further research on possible effects on stress, motivation and student well-being. The study covered only a single semester, so it is possible that the effect would diminish over a longer period. 

The study was published in the Journal of Economic Behavior & Organization in June 2026, and was written by Antal Ertl, Éva Holb and Barna Bakó from Corvinus University of Budapest.