**Item Response Theory**

Item Response Theory (IRT) is the system used by Computer-Adaptive Testing such as the GMAT CAT to determine which question is the “best” next question based on the demonstrated ability level of the test taker. It is a statistical model that relates the probability of a test-taker correctly answering a problem to characteristics of the problem and the test-taker’s true ability. It was first introduced in 1968.

The IRT model states that the probability of a correct response to item *i* for test-taker X is a function of *ai*, b*i, and ci* and test-taker X’s true ability. A person’s estimated true score is denoted as theta (). True score is the score a test-taker would receive on a perfectly reliable test. Since it is unavoidable for all tests to contain error, true scores are a theoretical concept; in an actual testing program, we will never know an individual’s true score. However, we can, compute an estimate of a test-taker’s true score and we can estimate the amount of error in that estimate.

P(*u _{i}*=1 | Theta

The model typically involves three parameters –

*a _{i}* defines the ability of the item to discriminate between individual test-takers,

*b,* is the difficulty of the item, and

*c _{i }*is the probability that the test-taker would get the question right solely by guessing.

On the GMAT, this model is used to determine your final score, i.e., where you stand on the ability scale, or, what your Theta is. For example, in the graph below, the horizontal axis is the ability scale, ranging from very low (-3.0) to very high (+3.0). When ability follows the normal curve, 68% of the test-takers will have ability between -1 and +1; 95% will be between -2.0 and +2.0. The vertical axis is the probability of responding correctly to this item.

The *a _{i}* parameter defines the slope of the curve at its inflection point. The curve would be flatter with a lower value of

The *b _{i}* parameter defines the location of the curve’s inflection point along the theta scale. Lower values of

The lower asymptote is at *c _{i}*=.25. (An asymptote is a straight line or curve A to which another curve B (the one being studied) approaches closer and closer as one moves along it.) This is the probability of a correct response for test-takers with very little ability (e.g. = -2.0 or -2.6). The curve has an upper asymptote at 1.0; high ability test-takers are very likely to respond correctly.

We will continue with our analysis on the GMAT CAT scoring system tomorrow.

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