Economics Education 101

From Inside Higher Ed:

Robert Frank, the Henrietta Louis Johnson Professor of Management and professor of economics at the Johnson Graduate School of Management at Cornell University, and the co-author of a standard introductory text, Principles of Economics (McGraw-Hill), thinks he’s stumbled onto a better way of introducing students to concepts like supply and demand and opportunity cost, foundational ideas of economics that apply to the real world. In his new book The Economic Naturalist: In Search of Explanations for Everyday Enigmas (Basic Books), Frank uses simple concepts to explain facts of life that, on second thought, are a little counterintuitive...

Q: One of the first themes that comes up in your book is how to teach economics, especially introductory economics. What’s your basic philosophy?

A: What we know is that the course as it’s traditionally taught doesn’t achieve much impact. Students are given tests six months after they’ve taken the course to see whether they understand basic economic concepts, and students who’ve taken the course don’t score any better on those tests than students who didn’t take the course at all. That seems like a pretty scandalous level of performance, to my eye. I think in other sectors of the economy we’d see malpractice lawsuits filed; in the university, maybe we get a pass on that sort of thing.

[Federal Reserve chairman and former Princeton professor] Ben Bernanke, my co-author on a Principles text and I decided that the real problem in the course was that people were trying to do way too much in it, so that you had these big encyclopedic texts with thousands of topics on the syllabus thrown at students. When you’re trying to throw that much information at a student, much of it in the form of equations and graphs, it all goes by in a blur and they walk away with nothing in the end. What we decided was that if you could commit yourself to the five or six key ideas, the ones that do most of the heavy lifting in economics, students really could master those after a semester, and the key device that we’ve stumbled onto for doing that is a writing assignment.

The narrative theory of learning now tells us that information gets into the brain a lot more easily in some forms than others. You can get information into the student’s brain in the form of equations and graphs, yes, but it’s a lot of work to do that. If you can wrap the same ideas around stories, around narratives, they seem to slide into the brain without any effort at all. After all, we evolved as storytellers; that’s what we’re good at. That’s how we always exchanged ideas and information. And if a narrative has an actor, a plot, if it makes sense, then the brain stores it quite easily; you can pull it up for further processing without any effort; you can repeat the story to others. Those seem to be the steps that really make for active learning in the brain.

The assignment that seems to have summoned those steps and put them to work in the best possible way is what I call the “economic naturalist” writing assignment. It’s a very simple assignment: You’re supposed to pose an interesting question — and I stress interesting; nobody wants to read your answer if the question’s not interesting, I tell them — and then use basic economic principles, one of these five or six principles that we hammer away at in the course, to try to construct a coherent answer in economic terms to your question. ...

What I can tell you about the writing assignment, though, is that it’s not easy for [students] to come up with an interesting question the first time.... By the time the second assignment comes due, much more typically a student will come into my office and say, “Oh, Professor Frank, can I do a medley? I’ve got these three great questions!” So, it’s quite visible in cases of those students that there’s a lot of rewiring going on in the brain over the course of the semester. They’re learning to look around them and see economic principles at work in ordinary settings....

Those stories, they’re interesting. When you hear them, you want to go tell people about them. That’s how you learn. It’s by taking the ideas out and using them, so by the time you’ve repeated a story two or three times, the idea behind it is just your idea forever. Students come back to me at reunion time — they’ll have been gone 10 or 15 years — many of them, the first thing they want to do, is tell me about extra questions they’ve been thinking about, and what do I think of the answer to this question? So it’s not like economics disappears from their radar screens after they leave the course, which is what I think happens for the majority of the introductory students who go through the traditional course. They’re still at it, 15 or 20 years later. ...

The idea of the program is that a good way to learn about a new idea is to write about it. As someone who’s written a lot, I can attest to the validity of that. I’ve never learned as efficiently about something as when I’m trying to write about it. So they gave me a T.A., the T.A.’s job was to grade the papers in my course. They realized that professors under time pressure don’t assign papers because they don’t want to take the time to grade them. So I started assigning a term paper in my upper-level course, which I hadn’t done for the reason of being pressed for time to do other things, and I noticed that the students got way more engaged in the course as a result of that paper. And I started cutting it back from 20 pages to 10 pages when I lost the T.A. (the grant ran out). And then from 10 to 5 — each time I cut it back in length, the papers seemed to get better. Right now the length of the paper is maximum 500 words. I can spot 500 words no matter what size font they use, so I tell them I won’t read past 500 words, but I stress that the best papers are often only one, two paragraphs.

Q: Is there something particularly counterintuitive about economics? Are we just not wired for it? You also tie it in your book somewhat to the theory of evolution: Have we just not evolved to understand economic concepts?

A: I think there are a lot of things that people seem to have trouble with. There’s a big branch of economics now called behavioral economics. One of its founders, Amos Tversky, was a psychologist at Stanford. He liked to say his colleagues study artificial intelligence; he prefers to study natural stupidity — the cognitive errors people are prone to make. It’s not that we’re stupid, but we use heuristics, we use rules of thumb, and the heuristics work well enough on average across a broad range of circumstances, but unless you really understand the logic of weighing costs and benefits, it’s very easy to be fooled into making the wrong decision.