The Journal of Economic Education

Published by Taylor & Francis (Routledge)
Print ISSN: 0022-0485
Publications
In the two articles above, Clausen and Kelley discuss the significance of the growing world population. The emphasis differs in each article, and readers must interpret the message by weighing the arguments on their own balance.
 
Ten years ago, at the World Population Conference in Bucharest, a debate raged about the relative merits of development and family planning.programs as alternative ways of slowing population growth. It is now clear that the dichotomy is false. Accumulating evidence on population change in developing countries shows that it is the combination of social development and family planning that is so powerful in reducing fertility. But further fertility decline, and the initiation of decline where it has not begun, will not come automatically. In rural areas and among the less educated, desired family size will not be reduced much without sustained improvements in living conditions. The gap between the private and social gains of high fertility (itself the product of poverty) calls out for government action-especially in areas relating to women that merit government action anyway.
 
The author argues that the recent controversy over the effect of the minimum wage on employment offers an opportunity for teaching introductory economics. Research findings on the minimum wage could be used to motivate alternative models of the labor market, such as monopsony and search models, and to teach students how economists test hypotheses with data.
 
Australia, Canada, Germany, and the United States experienced a substantial decline in undergraduate degrees in economics from 1992 through 1996, followed immediately by a modest recovery. This cycle does not conform to overall degree trends, shifts in the gender composition of undergraduate populations, or changing interests of female students in any of the four countries. There is no evidence that changes in the “price†of a degree to students, tightened marking standards or degree requirements, or changes in pedagogical methods caused the cycle. Jobs for economics graduates declined in the United States between 1988 and 1990 and thereafter recovered. With a two-year recognition lag, the pattern of employment prospects fits the U.S. slump in economics degrees perfectly. Unfortunately, employment patterns in the other three countries are inconsistent with the degree cycle. The explanation that fits the economic degree pattern best is interest in business education.
 
The author finds that a recovery in the number of undergraduate degrees awarded in economics seems to be under way.
 
The 2007-10 growth spurt (18 percent over three years) in U.S. undergraduate economics degrees came to an abrupt end in 2011 and 2012. Degrees awarded grew less than one percent over the past two years.
 
The 2007–10 growth spurt (18 percent over 3 years) in U.S. undergraduate economics degrees stalled in 2011. Degrees awarded were stagnant over the succeeding three years but show evidence of accelerating rapidly again in 2013–14.
 
A continuing decline in the number of undergraduate degrees awarded in economics is documented.
 
How much time do academic economists allocate to teaching, research, and service, and how much time do their departments want them to allocate to these pursuits? As a result of the decline in economics majors in the early 1990s, was there a change in the reward system and time allocation of academic economists toward teaching? In this study, the authors combine 1995 and 2000 survey data collected by Becker and Watts (1996, 2001) to describe teaching methods in undergraduate economics courses at five Carnegie Foundation categories of colleges and universities in the United States. The focus here is on a previously unreported section of these surveys, in which respondents were asked to indicate the percentage of time they allocated to teaching, research, and service and to provide the weightings they felt their own departments assigned to these activities in making decisions about annual raises or promotion and tenure.
 
Introductory textbooks are downplaying and treating Keynesian economics as a historic artifact, which is a mistake. Students should be taught that the Keynesian approach sees economics as a method rather than as a doctrine.
 
The author investigates the relationship between students’ absenteeism during a principles of microeconomics course and their subsequent performance on exams. Records were maintained regarding the specific class periods that each student missed during the semester. Records were also kept of the class meeting when the material corresponding to each multiple-choice test question was covered. A qualitative choice model reveals that students who missed class on a given date were significantly more likely to respond incorrectly to questions relating to material covered that day than students who were present.
 
The author presents new evidence on the effects of attendance on academic performance. He used a large panel data set for introductory microeconomics students to explicitly take into account the effect of unobservable factors correlated with attendance, such as ability, effort, and motivation. He found that neither proxy variables nor instrumental variables provide a solution to the omitted variable bias. Panel estimators indicate that attendance has a smaller but significant impact on performance. Lecture and classes have a similar effect on performance individually, although their impact cannot be identified separately. Overall, the results indicate that, after controlling for unobservable student characteristics, attendance has a statistically significant and quantitatively relevant effect on student learning.
 
The authors explore academic misconduct in various forms and consider the role of student perceptions. They gather data from students in introductory economics courses regarding 31 types of misconduct. They estimate the relevance of various determinants of misconduct, acknowledging that they may vary across misconduct type and that students' perceptions may influence their behavior. Their estimates reveal that although there are determinants that influence student behavior across misconduct type, some types of misconduct have a unique set of determinants. They find that a student's perception of what constitutes misconduct is an important component of this behavioral decision. These results imply that to reduce a particular type of cheating, one must consider its specific determinants and ensure that students believe that the act is misconduct. In addition, students must believe that the probability of being caught is high.
 
Estimated treatment effects according to the aptitude proxy(ies) included, dependent variable: mean exam scores (in points); N 117. GPA–ECN grade point average excluding economics; Cum Cumulative; SAT Scholastic Aptitude Test.  
Although academic ability is the most important explanatory variable in studies of student learning, researchers control for it with a wide array and combinations of proxies. The authors investigated how the proxy choice affects estimates of undergraduate student learning by testing over 150 specifications of a single model, each including a different combination of 11 scholastic aptitude measures—high school grade point average (GPA) and rank and variants of college GPA and Scholastic Aptitude Test (SAT) scores. Proxy choices alone cause the magnitude of the estimated learning gains to vary by large and meaningful amounts, with increases ranging from a C to less than a B or to a B. The authors found that collegiate GPA data offer the best proxy for students’ individual propensities to learn economics—a result that runs counter to researchers’ actual proxy choices. The results suggest that scholars should control for academic aptitude with college grades and either SAT scores or high school GPA or rank.
 
The authors provide a framework with which to analyze growth in a small economy with perfect capital mobility. The framework provides a diagrammatic representation of steady states that differs in interesting and important ways from the usual closed-economy Solow-Swan diagram. The authors use the key diagrams to illustrate the effects of changes in parameters such as the saving rate and productivity growth on steady-state values of macroeconomic aggregates. They compare the steady-state results for the open economy with those obtained using the more familiar closed-economy model. They illustrate the possibility of endogenous income growth.
 
The tenth comprehensive revision of the U. S. national income and product accounts introduced Irving Fisher's Ideal indexes to provide an accurate characterization of changes in economic activity that would not be subject to change when adjusted for a new base year. The author reviews important aspects of the new method, including chain-type annual-weighted quantity and price indexes that are rebased each year.
 
The authors describe an in-class exercise in which students participate in an auction to buy US Airways. The exercise is based on events of late 1995, in which neither United nor American Airlines decided to bid for US Airways. Two teams of students participate in an English auction. Students learn that the equilibrium of the sequential game is that neither firm bid and, thereby, learn why US Airways did not sell at that time. In addition, two other teams participate in a sealed-bid auction, in which US Airways will sell in Nash equilibrium. Results typically have lined up with theoretical predictions.
 
Learning from the Market: Integrating The Stock Market Game across the Curriculum is a guide for teachers of economics, mathematics, social studies, and language arts in grades 4 to 12. The author believes that Learning from the Market suffers from errors of fact and omission that seriously detract from its usefulness as a guide to the stock market and the economy. He suggests corrections and alternative activities that will enable instructors to continue to use the guide in conjunction with ever-popular stock market simulations.
 
Data Summary Statistics
Tolerance-to-Cheating Index, Obtained from Data Cell Averages
Tolerance-to-Cheating Index Predictions
Cheating is a serious problem in many countries. The cheater gets higher marks than deserved, thus reducing the efficiency of a country’s educational system. In this study, the authors did not ask if and how often the student had cheated, but rather what the student’s opinion was about a cheating situation. They investigated whether attitudes differ among students in Russia, the Netherlands, Israel, and the United States and conclude that attitudes toward cheating differ considerably between these countries. They offer various explanations of this phenomenon. In addition, they find that the student’s attitude toward cheating depends on the student’s educational level (high school, undergraduate, postgraduate). Finally, they show that the data from the sample can be aggregated in a natural and elegant way, and they suggest a tolerance-of-cheating index for each country.
 
Actual Grade vs. Expected Frequency 
Definitions, Means, and Standard Deviations 
Students often exhibit overconfident grade expectations and tend to overestimate the actual course grade at the completion of a course. Current theories of student motivation suggest such overconfidence may lead students to study less than if they had accurate grade perceptions. The authors report the findings of a survey of students enrolled in economics and quantitative courses at a large public university. They analyze the difference between a student’s expected and actual grade and how teacher pedagogies can influence student overconfidence. They find male students and those with lower GPAs exhibit greater overconfidence. Students in lower division classes have a greater tendency to be overconfident than do those in upper division classes. The findings also indicate that grading practices influence overconfidence.
 
Class Size Data
Probit Results (Dependent Variable = SMALL) Variable Coefficient z statistic
Much of the economic education literature suggests that the principles of economics class size does not significantly affect student performance. However, study methods have varied in terms of the aggregation level (student or class), the measure of performance (TUCE or course letter grade), and the class size measure (e.g., students who completed both the TUCE pretest and posttest). The authors perform an experiment with principles students using total exam points as the dependent variable in a model to explain student performance. By using the same instructor for all sections, the authors control variation in instruction, lecture material, and topic coverage; they also account for variation in student abilities. In contrast to many other studies, the authors find statistically significant evidence that small class size has a positive impact on student performance.
 
The author examined 12 recent editions of principles of economics t extbooks to determine the quantity of race- and ge n d e r- re l ated mat e ri a l . Comparing the results to earlier studies demonstrates how efforts to incorporate more such coverage within the economics curriculum have influenced economics textbooks. In general, there has been an increase in the quantitative coverage of race- and gender-related material as measured by the number of pages, names, and tables of the textbooks.
 
In this research, the authors examine whether M.B.A. students at a regional, comprehensive university who take only online courses learn as much as students taking identical courses in the traditional, face-to-face format. A simple comparison of test scores indicates that the amount of learning is similar in the two formats. However, when other factors are controlled, regression analysis shows that outcomes in the online environment are inferior to the traditional format. Given that the choice to take a course in the online environment may be related to learning, the authors use two techniques that control for sample selection bias. A two-stage least squares analysis yields findings similar to ordinary least squares estimation. However, a switching regression shows that the online learning environment is substantially less effective than the traditional learning environment.
 
The authors present an experimental design used to teach concepts in the economics of auctions and implications for e-Business procurement. The experiment is easily administered and can be adapted to many different treatments. The chief innovation is that it does not require the use of a lab or class time. Instead, the design can be implemented on any of the many Web-based auction sites (we use Yahoo!). This design has been used to demonstrate how information is transmitted by bids in an auction and how this can make it difficult for well-informed bidders to profit from their information, leading to disincentives for relatively informed bidders to enter an auction. Consequently, an auction may sometimes be an ineffective mechanism for procurement, compared with other options. The auction experiment shows how information can dramatically affect market outcomes and bidder incentives.
 
The authors summarize the results of a survey of 1,365 instructors of advanced placement (AP) economics courses; responses were received from 296 instructors (21.7 percent). The authors discuss the respondents’ textbook preferences, graduate and undergraduate backgrounds, teaching experiences, and evaluations of nontextbook teaching materials.
 
The author describes two learning activities for teaching economics at the advanced undergraduate level: a May American Economic Review (AER) papers seminar and an analytic project. Both activities help students learn to “do economics.†The May AER papers seminar promotes in-depth synthesis and interpretation on the basis of printed session papers of the American Economics Association’s annual meetings. The seminar relies on four structured components: a session-choice process, an advance question and answer exercise, a seminar discourse strategy, and a critical impact paper. The analytic project requires independent formulation and solution of a problem. Components include a procedure to write the project report, an oral class presentation, a listener-response exercise, and feedback in two phases.
 
In the information age, an exchange with the media is part of the duties the economics profession has to deliver to educate the public. A key issue is the education of policymakers through the media. It is the silver bullet of policy advice in comparison to commissioned research and face-to-face advice provided to the politician. It also pleases the vanity of the scientist: Few economists are willing to sacrifice the celebrity of public visibility to the effectiveness of face-to-face advice. The author advocates for a stronger role of researchers in the public debate and suggests ways to become more influential. He argues that in the long run agenda setting is a more promising strategy than reactive press activities.
 
We present a simple classroom principal-agent experiment that can effectively be used as a teaching device to introduce important concepts of organizational economics and contracting. In a first part, students take the role of a principal and design a contract that consists of a fixed payment and an incentive component. In the second part, students take the role of agents and decide on an effort level. The experiment can be used to introduce students to the concepts of efficiency, incentive compatibility, outside options and participation constraints, the Coase theorem, and fairness and reciprocity in contracting.
 
An obstacle to the teaching of principal-agent theory is the technical complexity and intractability of the general model. Even in academic studies strong assumptions are often imposed so as to derive an analytical solution. The author describes a graphical approach to the standard principal-agent model. Characterizing equilibrium in the contract space defined by the incentive parameter and insurance component of pay under a linear contract, this approach provides a simple and intuitive method for analyzing the principal-agent problem, which can be easily understood by students of economics with basic knowledge of algebra and differentiation. The approach has shown to be convenient and rich for comparative statics analyses.
 
The international substitution effect provides an explanation for the downward slope of the aggregate demand curve. The textbook explanation relies on fixed exchange rates. With flexible rates, the author shows how a rise in the domestic price level can reduce net exports by an indirect effect on the current account.
 
The authors suggest a way to teach Keynes’s principle of effective demand using a standard aggregate labor market diagram that should be familiar to students taking an advanced undergraduate course in macroeconomics. The analysis incorporates Kalecki’s version of the effective demand model to show Keynesian unemployment as a point on the aggregate labor demand curve inside the aggregate labor supply curve. The well-known Keynesian policy conclusions apply. In particular, workers and firms are unable to restore full employment by reducing real wages, underlining how important is the macroeconomic duty of the monetary and fiscal authorities to manage aggregate demand growth.
 
Cyclical response to demand shock
Initial response to price level and in ‡ation shocks
Response to temporary demand shock  
Response to temporary in ‡ation shock  
Responses to permanent in ‡ation shock  
This note analyses the inflation-targeting model that underlies recent textbook expositions of the Aggregate Demand-Aggregate Supply approach used in introductory courses in macroeconomics. The paper shows how numerical simulations of a model with inflation inertia can be used as a tool to help students understand adjustments in response to demand and supply shocks of various kinds.
 
The author explores the problems of portraying oil-price shocks using the aggregate demand/aggregate supply model. Although oil-price shocks are the most commonly cited examples of aggregate supply shocks, they violate the model’s assumption of constant relative prices (as acknowledged by the label, “oil-price shocksâ€). The resulting problems are effectively masked in textbook presentations by implicitly assuming that the supply shocks occur in a closed economy. However, the typical discussion is glaringly inaccurate when discussing the effects of oil-price shocks on oil-rich countries. Thus, the cogency of the standard model’s representation of oil-price shocks on open economies is compromised. A simple modification of the model that differentiates between production and absorption goods enables it to better reflect the effects of oil-price shocks on open economies.
 
The authors illustrate how a simple discontinuity in an individual's demand curve or inverse demand curve affects the shape of market aggregate curves. For private goods, the diagrams show that an infinitesimal change in quantity can lead to large changes in consumption patterns. For collective goods, the analysis suggests a theory of coalition building.
 
The authors describe a new, Web-based survey instrument that may serve as an aide for teachers and as an interactive exercise for high school economics students. The questionnaire asks students about their involvement with the economy, inquiring about employment, consumption, and living standards, and includes a few hypothetical consumer-demand questions. Teachers can request an automated report on the basis of their classes' responses, containing comparisons with a national sample. The motivation for the survey is twofold. First, in addition to enhancing their understanding of their students' backgrounds and familiarity with the U.S. economy, teachers will receive suggestions on ways to use the survey responses to illustrate economic concepts. Second, with lesson plans grounded in students' own experiences, the authors hope that students will be more actively engaged in learning.
 
Students use a computer simulation in introductory microeconomics courses that helps them check what they have learned from lecturers and conventional textbooks about supply and demand analysis. Computer tracking of their work shows progressive learning from repetitive practice.
 
The author reviews the development of computer-aided instruction and provides criteria for effective CAI on the WWW. He presents an experimental CAI package (oo_Micro!) intended to satisfy those criteria. This package integrates a textbook, mini-lecture series, graphical calculator, animated drawing program, spreadsheet, and econometrics package. It uses JAVA™ applets to represent microeconomic models as graphical objects that can be drawn, manipulated, and animated using the mouse.
 
Fatalities per 100 million passenger miles by mode.
The cross-price elasticity concept can be difficult for microeconomics students to grasp. The authors provide a real-life application of cross-price elasticities in policymaking. After a debate that spanned more than a decade and included input from safety engineers, medical personnel, politicians, and economists, the Federal Aviation Administration (FAA) recently announced that it would not mandate the use of child safety seats on commercial airliners. The FAA's analysis revealed that if families were forced to purchase additional airline tickets, they might opt to drive rather than fly, and driving represents a far more dangerous mode of travel. Given the relatively high cross-price elasticity between automobile travel and air travel, the FAA concluded that the mandatory child safety seat policy failed to pass the cost-benefit test-the policy would lead to a net increase in the number of fatalities. The authors review the FAA's decision-making process and highlight the role of economic analysis in developing public policy.
 
Most people learn to drive without knowing how the engine works. In a similar vein, the author believes that students can learn economics without knowing the algebra and calculus underlying the results. If instructors follow the philosophy of other economics courses in using graphs to illustrate the results, and draw the graphs accurately, then they can teach economics with virtually no algebra or calculus. The author’s intermediate micro course is taught using mathematical software that does the mathematics and that draws accurate graphs from which students can see the key results. He backs up this no-algebra no-calculus approach with tutorial exercises in which students do economics and with exams that require no knowledge of algebra and calculus. The students end up feeling the economics, rather than fearing the algebra and the calculus.
 
Because most students work and pay FICA taxes, they relate to the issue of Social Security. Students collect data and forecast economic and demographic variables that determine future tax rates. Students then discuss government policies that are derived from "their" economic models.
 
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