How to Make Economics Come Alive for Students

On a sunny April afternoon, students in associate professor William Kolberg’s Environmental Economics class were not sitting captive in their seats, staring at graphs, and listening to the drone of a professorial lecture. Instead, they were standing up, haggling and negotiating with each other in the center of the room, trying to close a deal. Once the deal was made, they headed to the front of the room where Kolberg waited to record the results of their negotiations in a growing list of numbers on the blackboard. The students repeated this scenario three or four times throughout the class period, generating excitement and data simultaneously.

What was going on? Were these students studying economics or playing a game? The answer, according to Kolberg, is both -- this kind of “classroom experiment” is designed not only to engage students but also to impart a deeper understanding of important economic concepts. Kolberg notes that “so much information has been accumulated in the field of economics that the temptation is there just to feed students the information. But the undergraduate experience requires some amount of discovery, and there is more effective learning when students try to discover the answers themselves.” He adds: “While studying supply and demand may seem abstract, and well . . . boring, participating in an experimental market can be almost . . . exciting.”

Students agree: applied economics major Mike Nowak ‘08 reports that this kind of classroom experiment “helps you learn the concepts because it’s hands-on; you do the experiment and actually get to see how it really works for a market to find equilibrium -- it makes a big impression on you.” “Plus, it’s fun,” says Craig Rosenberg ‘08, economics minor. “Everyone enjoys the day more when we do experiments.” Kolberg observes that “it’s not only good for students; it’s good for the instructor because it’s energizing to see how into it the students get.”

Associate professor Patrick Meister also makes extensive use of classroom “games” in his teaching: “I believe that an extremely effective and important way for students to learn economics is to ‘do’ economics. The in-class games give the students a framework to help learn related concepts. Furthermore, the link between in-class economic games and real-world competitive situations is especially interesting to students who are hungry to know how to apply economic theory to real markets.” Meister has authored articles on some of the games he has designed -- including one in which students simulate an airline auction -- and feels that these simulations are keys to effective teaching.

Meister also organized the economics department’s first-ever Fed Challenge team in fall 2006, working closely with associate professor Roger Hinderliter. This challenge plunges students into the heady world of national monetary policy. Coached by Hinderliter (who once worked for the Federal Reserve as an economic adviser), students spent several weeks analyzing macroeconomic data and developing an argument about the next steps for monetary policy in the Federal Reserve. Supported by an H&S Ithaca Fund award, the team traveled to Buffalo for the competition. Students agreed that it was a learning experience: “We gained invaluable insights into what we need to do next time to be serious competitors.” Meister and Hinderliter have created a one-credit fall semester course for student team members, who will compete for a second time in November’s Fed Challenge.

Another theme in making economics come alive is “relevance.” Faculty provide students with real-world examples that enable them to see how abstract theory and concepts are connected to their own lives. Professor Frank Musgrave says the goal is to have “current issues examined in an academic environment.” He makes extensive use of the Wall Street Journal to help students connect what they learn in the classroom to what is going on in the world. Assistant professor Shaianne Osterreich, whose teaching and research focus on globalization, shares this approach: “Students come in perhaps with a vague awareness of ‘globalization,’ and all they know is that there’s an uneasiness about it, but they don’t know why.” Her goal is to provide students with the analytic tools to understand current events.

Professor Elia Kacapyr, chair of the economics department, believes that another way to make economics come alive is to show students that “as a behavioral science, economics is concerned with all sorts of questions, most of which have nothing to do with money, interest rates, or the Dow Jones Industrial Average. I like to show students papers [written] by top-notch economists that investigate the behavior of criminals, voting patterns in presidential elections, and factors affecting substance abuse.” Kacapyr also engages his students in analyzing data that has a direct connection to their own lives. For instance, in 2006, students in his Econometrics course analyzed data from a Core Institute survey conducted at IC in 2004 and 2006 on drinking behavior. The students applied econometric techniques to the data, and in the process unearthed “many counterintuitive results.” One such finding was that “students with GPAs of 3.5 and above actually drink more, all other things being equal.” From this exercise, students learned that econometric techniques can provide insight into the social behaviors of their peers.

In all these ways, faculty in the economics department demonstrate their commitment to showing students that there is more to economics than dry mathematical formulas and arcane graphs; faculty have truly made the field come alive for students.