Economics is not an easy discipline, and it’s not a subject teenagers are itching to learn. Most college-educated adults look back on Econ 101 as a boring series of lectures, with too many graphs about “widgets” and “utils.”
One of the best parts of teaching high school econ, though, is that so many professional economists and teachers have dedicated their lives to changing this.
Consider a new lesson I saw presented last week. Half of a class is assigned to be textbook sellers, who want to get rid of a used book for at least $20. The other half are textbook buyers, who are given no specific budget but asked to consider whether their assigned “buyer number” would be a reasonable price.
After a brief market simulation — in which each seller tries to make a deal with one buyer — the buyers report how much they paid. The buyers with higher numbers, like 80, ended up spending far more on average than buyers with lower numbers, like 40.
This is what economists call the “anchoring effect”. Although the buyer number was arbitrary and had nothing to do with the book’s value, simply thinking about that number shaped what buyers were willing to pay.
Kind of cool to experience the anchoring effect before learning the definition, right? That’s the kind of lesson that sticks.
And it helps students understand why car dealers show you a higher price – the MSRP – before revealing the sticker price. For some reason, the first number in your head influences what you are willing to spend.
No one understands better than professional economists that their subject can be dry and difficult, but they know how important it is, even for the average citizen.
How can consumers make good spending decisions if they don’t understand the forces that shape their thinking? How can voters make good decisions about public policy if they don’t understand the free-rider problem, the economic impacts of taxation and regulation, or perverse incentives?
Teachers talking at their students about these complex ideas doesn’t work.
Fortunately, dozens of PhD economists, working with high school teachers, have created hundreds of lessons that incorporate simulations and real-world experiences to make abstract concepts like these surprisingly easy to understand.
The anchoring lesson, written by Dr. William Bosshardt of Florida Atlantic University and high school teacher Andrea Caceres-Santamaria, was shared with teachers during a standing-room-only session at the national Council for Economic Education conference last week.
Another lesson on information asymmetry – again using a market simulation to show how humans behave in markets – was introduced by Dirk Mateer of the University of Arizona, partnering with high school teacher Megan Kirts.
I don’t know if this kind of collaboration happens in other disciplines, but it should. High school teachers are unlikely to develop complicated, hands-on activities without some mentoring or training. We are afraid of getting the facts wrong.
When a concept is new to you – as the anchoring effect is for most high school teachers – it’s easier to just define and move on than to think up an effective simulation. Even running a simulation can be intimidating, if you aren’t trained in how to do it.
But high school teachers must use these kinds of strategies if they want to engage their students. If it can be done for economics – which has a widespread reputation for being boring – surely it can be done in every class.