After ten years of academic economics, as both student and instructor, I am aware of two things: (1) students often miss important economic principles, because they are too busy understanding abstract mathematical models, and (2) they forget the material two weeks after the class is over, because much of economic “learning” is actually memorization of definitions and mechanical solving of equations.

While some mathematics and graphical analysis is essential and can facilitate learning greatly, too much of it could be counterproductive. I often try to remind myself of Alfred Marshall’s advice about the use of mathematics:

[I had] a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypotheses was very unlikely to be good economics: and I went more and more on the rules – (1) Use mathematics as a shorthand language, rather than an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6) If you can’t succeed in (4), burn (3). This last I did often.

Thus, I try to challenge students about the really important implications of economics—those “common sense” principles that can make a difference in one’s life even after the final exam is over. One way, of course, is to relate the abstract material in the textbook to everyday life; to move away from the “apple and banana” economy in the textbook to explaining phenomena in the real world. This makes learning more relevant, and motivates students to spend more time studying.

What’s in the news?

I usually start my lectures with a discussion of recent economic news. I am using this strategy to show my students how versatile economics is—that they can relate the concepts they study to almost everything that happens in their life. I keep a blog on this webpage, and all my course webpages, where I post articles that I stumble upon in the news.

Article presentation

To remove my personal bias as to what is important, I ask students to find a recent article in the news that they find interesting, and relate it to the concepts studied in class. Once everybody has completed this assignment, I randomly select students at the beginning of my lecture to present their article. This is also a great way to interact with students.

Class demonstrations / games

Another way to apply what is being taught is through various class demonstrations. For instance, in one of my first lectures, I ask my students how is it possible that economists can predict human behavior when people are so different and usually everybody tries to express their uniqueness through their free choices (one look at how students are dressed is sufficient). Most students recognize that this is a problem. Then, I offer them two extra credit points on one of their exams if all of them jump on one leg for a minute shouting” Professor Nikolaev is the best teacher ever.” Of course, and this is almost always the case, everybody participates in this exercise. The moral of the story is that I can use the two basic principles of economics, that people are self-interested and respond to incentives, and predict with almost certainty the outcome of this exercise.  This very simple exercise shows that some simple and very intuitive economic observations have powerful implications.

Some good resources that I have successfully used in my courses have been Games Economists Play [visit here] and Teaching Economics [buy on amazon.com].

The internet / use of media

Of course youtube videos and other interactive internet resources are essential tool to the modern professor. Not only students relate to these sources of information easily, because they are so used to them, but they also allow me to bring into the classroom some of the greatest intellectuals of our time—whether it is Milton Friedman, Noam Chomsky, or President Barrack Obama, all of them are only one click away. A great source of inspiration to me over the years has been the website of Prof. Dirk Mateer [visit here].

Class examples / discussions

I have found that the most effective way to teach abstract concepts to students is to start with real world examples, and then generalize from them and present the theory. This approach to teaching is more intuitive to students who are used to generalizing from particular examples in their everyday life. In addition, such approach puts the material into an understandable context, and gives relevance to what is being taught.

Direct approach

Of course, the above practices are the less obvious way to relate the concepts in the textbook to everyday life. But another, more direct approach, is to teach students economic decision making through their own experience. What better way than to use the course itself for this purpose?

For example, on the first day of class, I tell my students that I don’t require attendance. But this is not to say that they shouldn’t come to my lectures. On the contrary, what my words imply is that students are old enough to be responsible for their own actions, and I trust them to make the most valuable decisions for themselves—after all, this is what economics is about. If they think that their time is optimized by staying home, drinking coffee and reading the textbook, spending time with their girlfriend, or watching the sports center, they should do it. They ought to be aware, however, that there are trade-offs to any choice they make. Staying home and drinking beer means missing assignments and potentially getting a lower grade for the course—which is the opportunity (indirect) cost they have to pay for their choice.

The lesson, then, is that when deciding what to do with their resources (in this case time), students are also deciding what NOT to do with them. The latter is their opportunity cost. Growing aware of these unseen, indirect costs (or potential benefits) is one of the main goals of studying economics.

Finally, I provide students with all kinds of incentives and economic lessons in my syllabus. Another example is that I diversify their portfolio, i.e. their grade is based not only on three exams, but on many assignments. This lowers the risk of getting a poor grade if they don’t do well on one of their exams. On the contrary, even if they are not the best test-takers, as students often complain, they still have plenty of opportunity to do well if they put the necessary effort.