Most importantly, practice tests tell candidates which topics they have not mastered and encourage them to focus future learning on weak areas.
Almost as important, practice tests tell candidates which topics they have already mastered. They can then direct their learning to other areas and spend minimal further time on the topics they already know.
Practice tests can also feed back to the instructional team the strengths and weaknesses of each candidate and for the candidate group. It can tell which topics have been successfully learned and which areas need more work.
It’s well understood in psychology that you are more likely to retain something if you learn it spaced (separated) over time. Since practice tests stimulate revision and studying, they encourage earlier learning and so space out learning, which is likely to improve retention. See this Slideshare for more information on how assessments can help space out learning.
The accuracy and fairness of exams can be impacted by some candidate’s fear or anxiety around the exam process. Practice tests can reduce test anxiety. To quote ETS on test anxiety:
“The more you are accustomed to sitting for a period of time, answering test questions, and pacing yourself, the more comfortable you will feel when you actually sit down to take the test.”
Accuracy and fairness can also be impacted by problems with familiarization or incompatibilities with the computers and software used for the testing. If the same equipment and software can be used in practice, this greatly reduces the chance of problems.
Taking a test doesn’t just measure how much you know, it helps reinforce the learning and make it more likely that you can retrieve the same information later. It’s a surprising fact that taking a test can actually be more beneficial to learning than spending the same amount of time studying. See Evidence from Medical Education that Quizzes Do Slow the Forgetting Curve for one of many research studies showing this.
Giving formative or practice tests seems to improve learning as well as final exam results. See Evidence that topic feedback correlates with improved learning or Where’s the evidence for assessment? for a couple of articles with evidence of this.
Such tests are consistent with good practice and with assessment standards. For example the international standard on delivering assessments in the workplace ISO 10667 states:
“The service provider shall … where appropriate, provide guidance on ways in which the assessment participant might prepare for the assessment, including access to approved or recommended sample and practice materials”
It is crucial that exams are fair and that they are seen to be fair. By providing practice tests, you remove the mystique from your exams and allow people to see the question styles, to practice the time planning required and to have a fair view of what the exam consists of. It helps level the playing field and promotes the concept of a fair exam, open to and equal for all.