Teaching the Economic Way of Thinking – a new approach to teaching introductory economics in a business degree

1. Teaching the Economic Way of Thinking – a new approach to teaching introductory economics in a business degree Uwe Dulleck & Tommy Tang ATEC 2009 School of Economics and Finance

2. Introduction Disclaimer:This is a personal and subjective report of a non-expert in teaching and learning studies. It describes and discusses the approach I/we took to redesign the first year economics course at QUT. The (personal) aims were to • provide an easier transition for students into university teaching & learning. • win more students to choose economics as a major. • offer business students with a more useful content. School of Economics and Finance

3. Introduction Economics 101 (BSB113) in Business degree • 2000+ students with heterogeneous background (esp. wrt quantitative methods) per year. • A majority of students are working a substantial number of hours each week. • Some students (~20%) have some previous knowledge in economics from highschool. • One of 8 core units in QUT business degree. • Only a small minority will undertake further studies in economics. School of Economics and Finance

4. Introduction What can be changed? • Understanding vs. skills • Threshold concepts vs. basis for further study. • Meta knowledge (the ideas behind a theory) vs. vocabulary and definitions. What may (business) students expect? • Basic understanding what economics is good for. • An insight in (current) economic debates. • Some basic vocabulary to use sources of economic knowledge. School of Economics and Finance

5. Introduction Literature: • Voss et al. (1986), Stillwell (2005): teaching introductory economics puts a lot of emphasis on imparting abstract models and technical skills to students. • Kirman (2001), Lewis and Norris (1997): surveys revealing students complaints on lack of relevance of the subject. School of Economics and Finance

6. Introduction Our approach • Introduce students early to threshold concepts. (first 1/2 lectures) (Big ideas) • Introduce students to the modelling/theory approach with a focus on simple models based on introspection. (lectures 2-5/6). (Why and how of economic arguments) • Discuss “big” economic topics like the financial crisis, the labour market, the Australian environment by presenting the important institutions as well as the pieces of the theory relevant for the topics. (lectures 7-12) (Applications) … (repetition) School of Economics and Finance

7. Outline • Our approach in detail • First evidence on student feedback / effectiveness • Conclusions School of Economics and Finance

8. Basic philosophy From threshold concepts … to theory … to applications School of Economics and Finance

9. Basic philosophy Lecture/chapter 1/2: core ideas, intuition: backbone document Lectures/chapters 2-6: fleshing out of core ideas into standard terminology Lectures/chapters 7-12: applying the terminology and ideas Strategy: immediate depth, followed by repetition and increasing breadth. Thoroughly understanding the core ideas is key to the rest. School of Economics and Finance

10. A new book: • 12 chapters (1 for each lecture) • Average length 30 pages (manageable length) • Use of boxes for- background discussions/illustrations - use of advanced methods (calculus) - additional material for economics majors • Examples/exercises that includeresearch style questions in the application chapters. School of Economics and Finance

11. An example: • Threshold concept: Equilibrium (no agent of an economy would want to do something else) • Theory: Market equilibrium(demand = supply, the market cross) • Theory: Efficiency & market equilibrium(Pareto efficiency, market failure – e.g. externalities, asymmetric information) • Application: Environmental Economics(Data & Players in the Australian context, externalities and the environment, regulations & environmental taxes in Australia) • Application: Labour Markets in Australia(Data & role of government in Australia, what affects demand and supply on the market [incl. choice/opportunity cost principle], how can the government affect the equilibrium?) School of Economics and Finance

12. Our Strategy • Repetition: Threshold concepts are revisited 3 times: as basic concepts, in theory and in applications. • Meta-theory: Theory is built up in a simple (to some degree abstract) way – to deliver an idea what constitutes a theory. • Applications: Bringing together empirical and institutional knowledge with relevant theory that was developed before to put the theory into context. School of Economics and Finance

13. Comparison of the traditional and the ‘repetitive’ approaches School of Economics and Finance

14. Assessment • Mid-semester exam (traditional) • Invigilated essay (end of term), 4 questions posted after midterm, 2 are on the exam. • Topical question bringing together theory and applications and own research. • 30% of the final exam mark allocated to own research. • Additional assessment item – research plan for one question incl. correct referencing. School of Economics and Finance

15. Feedback From students: • Quantitative data (LEX): Above average compared to the other core units. • Written feedback (semester 1/2008): from negative to positive. School of Economics and Finance

16. Written Feedback (LEX) • (+) BSB113 provided a really thorough introduction to Economics, hard to grasp at times but incredibly useful for a first year student. • (+) The second half of the unit was best ... I found it interesting the way the theories were applied to what we had learnt in the first half of the unit. • (-) A review of the prescribed textbook to encompass a broader and more in depth analysis of basic economic principles and theories etc.. School of Economics and Finance

17. “Voting by feet” Feedback School of Economics and Finance

18. Conclusions We believe this is a change in the right direction. • First year students can learn what a theory is … and how it is applied to answer specific questions. Evidence/further research • Test the effect on student’s ability to grasp economic concepts. • Seriously study the effect on the uptake of economics as a major. School of Economics and Finance