The direct democratic choice of an examination standard, i.e., a performance
level required to graduate, is evaluated against a utilitarian welfare function.
It is shown that the median preferred standard is inefficiently low if the
marginal cost of reaching a higher performance reacts more sensitively to
ability for high than for low abilities, and if the right tail of the ability
distribution is longer than the left tail. Moreover, a high number of agents who
choose not to graduate may imply that the median preferred standard is
inefficiently low even if these conditions fail.
JEL Classification: I21,
Keywords: examination, school, drop-outs, democracy, median voter.