Last night I did quite a bit of uploading onto my intermediate microeconomics blog, The Economics Metaphor, posting Chapter 15 on Cost-Benefit Analysis, Chapter 16 on Comparative Statics of Consumer Choice, and Chapter 17 on Applications of Consumer Theory. (Really, much of that content was already online elsewhere. At the end of this post I will provide links to that. But here it is organized in a coherent structure. That is, coherent within a chapter. The ordering across chapters needs to be redone and some content that is within its own chapter at present should be regrouped with other other content in different chapters.)
In each of these chapters there is an Excel workbook with a minimum of 5 spreadsheets, each with "Excelets" about the economic models. Excelets are numerical animations that can be run by pushing on a control button (Excel calls it a spin button) that changes parameter values and moves the graphs in an illustrative way. The versions I have here should work on both a PC and a Mac, which is a definite plus. The "cost" of getting this interoperability is that while holding down the spin button changes the parameter value continuously the graph doesn't change until you let go of the button. (There is a different control called a spinner that allows for continuous movement of the graphs, but it only works on a PC.) So if you want to get a sense of animation you need to repeatedly click on the button.
Following the post with the Excel workbook, there are brief YouTube videos - micro lectures if you will - that explain the economics and how the graphs should be used. These are screen capture movies with my voice over, then captioned. I didn't write a script for these, so on occasion my word usage lacks precision. But they are in the style I usually use to teach this stuff. In delivering this content to my class this semester, each video is embedded in a quiz question in Moodle. I doubt students would watch this stuff unless there was some assessment tied to it. I'm still not sure that all the students watch the videos, but the hit counters in YouTube and the Moodle tracking that explains how long students spend on a quiz suggests that many are watching the videos. (If any instructor is interested in getting the Moodle quizzes, email me and I'll send you the Respondus files for them. I was also learning how Moodle works this semester, so the early quizzes need to be reformatted to better function with IE, but even for them you can get a sense of the assessments.)
The chapter concludes with a screen shot and link to an essay I wrote that relates to the topic. These essays can be read as stand alone pieces. They are meant to illustrate the underlying idea and only occasionally do they explicate the models further. Mainly they are meant to provide realistic extensions in a way that the students should be able to relate to. The idea is to give some depth of analysis on a topic that should be of inherent interest to the student. In many cases these are topics the students will have thought about before, but likely not from an economics vantage. So the aim is to give the students some perspective that economics can contribute to their understanding of why things are as they are. There is a further goal to go substantially beyond what is in the basic models, and provide some depth and richness about actuality and treat more advanced economic ideas discursively rather than by modeling them. Style-wise, most of these essays are similar to my blog posts, though usually somewhat longer and I hope with fewer typos and outright errors. For a while I did aloud readings of the essays and if I did that the audio is posted too. I haven't gotten around to doing readings of the more recent ones. I am not sure the readings have much value for native English speakers but perhaps they do have value for international students.
Earlier in the semester I created the content for Chapter 12 on Elasticity, also in the above format, The remaining chapters has content that I've developed over the years, the most recent of which are the two essays, Chapter 9 What If Analysis, which is written in a dialogic format, and Chapter 13 The Economics of Time. In the rest of this post I'd like to discuss my aspirations and issues with this content. I will do this first about the economics and then again about how the technology is employed. If anyone does take a serious look at this stuff, I'd love to get some feedback on it.
I should note that my target audience are non-majors who are taking the course as a requirement. So a big concern for me is about ultimate take aways for the student after the course has concluded and motivation of the student while the course is ongoing. With this I try to keep in mind this excellent piece by Robert Frank, a strong indictment against how we teach microeconomics. He is talking about Principles and here I'm talking about Intermediate, but I believe the same issues are at root. So the core theme is to treat the basic ideas simply but then apply them with subtlety, thereby demonstrating the power in the ideas.
One can get some mileage this way by eschewing marginal analysis and replacing it with discrete choice, which has the virtue that students can readily eyeball the preferred alternative and perform the requisite arithmetic. The Supply and Demand chapter develops step function supply and demand curves out of a binary choice framework and first does this with a small number of buyers and sellers so the student can track all the agents in the economy. It does this via a matching process, first one that is cooked to create more volume than in competitive equilibrium with transaction prices idiosyncratic to the match, then with efficient matching where the transaction prices that emerge have a stability property that the previous ones lack. Then the economy is expanded, not via replication but rather by introducing new buyers and sellers who are "close" in their values and costs to the original ones. The development is intuitive but also convincing.
The Shifts In Supply and Demand chapter complicates things by looking at a quaternary choice model to accommodate interactions across markets. It is a completely non-standard way of doing things yet I'm struck that it is a very good way to develop notions of reservation price and opportunity cost. And on the latter one can then give a rather full discussion of outlays versus opportunity costs, introducing notions of sunk cost and foregone revenues that would be too obscure for the students if developed outside a discrete choice framework. My students this semester still found this somewhat difficult, so the presentation surely can be improved. But I believe they could see how these economic ideas related to what they were studying elsewhere without difficulty, so on that score students wouldn't tune out just because it was a bit hard.
There are three essays for supply and demand - on retail markets, housing markets, and stock markets. The aim is to show that the model applies to quite different contexts but one has to stretch things to get the model to fit. Then the various markets are contrasted and some richer features of each are considered - sticky prices and inventory in retail markets, intermediaries who may have their own agenda in housing markets, and price fluctuation over time along with the Efficient Market Hypothesis in stock markets. The model stays fairly simple but the discussion is quite rich and features many topics that would be otherwise ignored if they had to be modeled. The one essay to accompany the shifts in supply and demand chapter is on what if analysis. Economists tend to think the notion of opportunity cost is easy, which it is under complete and perfect information. But in reality people don't know about their opportunities as much as they know about the alternatives they do choose. If the economics is to assist the students in making choices after the course is finished, we must face up to that fact. So students need to relate these ideas to the need to gather information, limits in doing so, and complexity in real world decisions.
I believe this beginning lives up to the ideal that Frank asks we deliver on. Thereafter I found it increasingly difficult to keep the content at that level. In the chapter on budget constraint and choice, a discrete approach is maintained for a while as a way to frame the problem but is ultimately abandoned for the indifference curve approach because the former is too clunky. So we see a reason for the math as a way to make things easier, but at this point the modeling has lost its intuitive feel. The essay in this chapter is about the difference between planning and actual behavior, how the one informs the other but how they don't coincide. In the chapter on elasticity, the model is the traditional one with only a hint of intuition by discussing what elasticity is trying to measure in a somewhat novel way. However, here I believe I produced my best essay, where there is an extended discussion of comparing in-state students to out-of-state students in their demand to attend our university as well as comparing the demand for summer courses to the demand during the regular terms. Students get to see the elasticity ideas applied to markets that they themselves have some stake in, giving them some insight into those markets and getting them to better appreciate the underlying economics.
I will not give a blow by blow on the remaining chapters other than to say the modeling is more traditional. I'm not sure that is the right way to go, but since I wrote these in real time and needed to get them done, I felt less freedom to try alternative approaches. Consumer theory may be better explicated with piecewise linear indifference curves than the typical smooth indifference curves and in the future I might redo some of this that way. But there is still the issue that there is a lot of machinery and not nearly enough intuition here. I'm unsure what to do about that. And for this semester there is more to create. I need to produce two more chapters before this semester concludes.
Let me turn to the technology and the mode of presentation. Several years ago I got enamored with Dialogic Learning Objects and wanted to produce content in that style, both the theory done in Excel and the narrative too. On the theory part, I believe the approach is better, but it is harder to construct those than it is to make micro lectures based on Excelets. More recently I've been making the latter so I could crank them out. (This may also be why some of the later stuff has less intuition in it.) There is the further issue that both the supply and demand and the shifts in supply and demand workbooks have macros in it. The file type is xlsm. It works fine on my own computer but some students had problems with the macros. That is a loser. Whatever the other merits of the stuff, if students have technology problems with it that trumps things. It is also true that this file type only works on a PC. So those exercises need to be rewritten without macros. There is no doubt about that. Where there is doubt is whether it should be micro lectures, or a dialogic approach, or both. I don't really know that. One reason to make this post is to seek feedback on that issue.
With the essays, it is not that much harder to write them in a dialogic approach, but if students are going to read them straight through rather than answer the questions at the various junctures (in a small seminar one can do that but in a regular sized class it is not practical to implement that way), I'm not sure of the value for them. I've received a couple of comments from students this semester that they liked the dialogic approach, but not nearly enough to be decisive. So again, I'm looking for feedback on the issue.
Let me close with a bit about aspirations for this stuff. First, there is some experience needed to make a reasonable quality Excelet, but mathematically inclined students should be able to do this with some training and practice. Given the Excelets, anyone can make the micro lectures (captioning is arduous but do-able). So I would like to see this type of thing being produced much more broadly and maybe not so much for college level economics as for high school level math and science. I don't know how to go from here to there on that, but since I do see some real potential for this outcome, I'd like to begin a discussion on the subject. Second, at the college level it may be hard to do this because each faculty member has their own idiosyncratic way of wanting to teach a course like intermediate microeconomics, but if a few others experimented making these things there could be a way to share each others creations. That too might be worth talking about.
Third, instead of or in addition to the essays, students should be reading some accessible (intellectually) papers on fundamental economic ideas that broaden the scope of what we cover in intermediate micro. For example, I had the students read Paul David's paper on QWERTY during the same week that we talked about the economics of time. Akerlof's Lemons paper and perhaps Okun writing on implicit contracts gives other examples of what might be read. Since I think we incorrectly teach about monopoly and economic profit as evils rather than as necessary part of effective dynamic incentives, I might have students read Klein and Leffler on assuring contractual performance. I'm sure other instructors could come up with still more readings if they put their minds to it. In my view, this is different than trying to bring in pieces from The Economist's Voice, which are quite topical but not likely as deeply important. The goal is to modify the scope of topics in Intermediate Micro by giving students more realistic modeling approaches to consider. This would change the nature of how we teach this course and is the sort of change any instructor could implement on their own without too much investment of their own time. What we need then is some sense of how students would react to such readings as compared to typical textbook content, based on a variety of instructors experimenting in this way.
We also need to know how colleagues would react to this sort of change in the course. As I mentioned in discussing the audience I'm aiming for, it's the non-majors. Do those units that require intermediate microeconomics for their students have embedded knowledge as to the purpose of the requirement? Do they want a Henderson and Quandt course? Do they want the type of essays I'm producing as part of the course? What factors matter in determining the answer to these questions? Right now I'm making that call on their behalf in my class. It would be good to know whether I'm on the right track.
Links to Archive
YouTube Videos (Some are elsewhere, most are here. Note that captions appear as overlays here, so it is better to watch the videos when they are embedded in blog posts, where the captions are below the video.)
Transcripts of Videos