Wednesday, April 27, 2005

Instructor "visualization" of the dialog with students

Let me begin here with a set of questions that might engage a student in a microeconomics class?

"What type of goods when you purchase them do you look for the lowest possible price and what type of goods when you purchase them do you care about the seller (or the full supply chain) making money from the transaction?"

This question offers a bit of a puzzle, of course. The natural first reaction is to say that buyers always want the lowest price. But it suggests there are cases where that isn't the case.

"Kids who grow up in middle income families have an advantage over kids who grow up in lower income families. There are many components of this. Let's focus on the differences in parental educational attainment (there is strong correlation between that and income) . How would you place a dollar value on the advantage on a per annum basis?"

This questions seems like it is from outer space. It is asking for a back of the envelope calculation. But what type of calculation? That is the mystery.

"Some retail merchants deliberately locate their stores in high rental areas like Water Tower Place on Chicago's Miracle Mile. Others locate their stores in surburban shopping malls. And still others do both. What explains the location choice? And do the stores in both locations charge the same price or different prices to reflect the location cost differences?"

The first obvious answer is that stores locate to be close to their customers. But the question about charging the same price or not is mysterious. What would affect the answer to that?

Showing that an economic analysis can lend insight into answering these questions is the way for me as the instructor to convey to the students that studying economics has value to them. These type of puzzles are of intrinsic interest. Resolving them creates a sense of accomplishment and understanding.

These particular questions can be addressed online fairly nicely with the "content survey" approach that I've described elsewhere. That is fine in one way, but making this type of thing the focus of the course departs rather dramatically from the traditional way the intermediate micro course is taught, content-wise.

Two of the three questions about fall under the general mantle "economics of information." That is the the cool, fun stuff to talk about in an economics course. But normally when one teaches that stuff is an overlay on top of some more basic stuff. The more basic stuff is less cool, less fun. I would argue that it is intellectually important for someone who will study more economics and that is perhaps the primary reason for teaching the course that way. But most of the students who take the class won't study more economics. Frankly, they don't like this course and since for most it is a requirement, they don't understand why it is required.

For example, consider consumer theory, which is usually the lead off topic in such courses and which, if you really put the students through their paces, should constitute between one third and one half of the course. The fundamental lessons from consumer theory are first, substitution (and complementarity) between goods and services, the notion of budget constraint, the notion of elasticity of demand, an important idea about compensation which is fundamental to cost benefit analysis, and revealed preference. There is an awful lot of machinery developed to convey these ideas. For those who love mathematical models (the few engineering students who take the class) the machinery is appreciated for itself and so this is a rewarding experience. For the rest of the students, and most of these kids have very high math scores as measured by ACT or SAT, this is torture. It seems relevant to nothing for them and it actually obscures any lifelong lesson that they may take from the course.

So the issue as an instructor in my shoes is to say, "to hell with those students, I'm going to do a bang up job teaching the rigors of price theory," or alternatively to make various compromises on that so the coure can be more real for the majority of students who enrol. Which choice should I make? My current thinking on resolving this dilemma is to put consumer theory at the end of the course and see if I can introduce more of the information stuff early, but from the firm side, where I think it is easier and more transparent. We'll end up covering about the same stuff but in a different order and with a different emphasis. At this point in my teaching career, I don't know how to do a good course well without drawing the students in. That has to be highest priority in any design.

1 comment:

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