‘I wish I knew what on earth was going on in their minds when they wrote THAT’, we sometimes mutter to ourselves when marking work that shows the gap between what we thought we had taught and what a pupil seems to have ‘learned’. The truth is that we cannot be 100% sure of what is going on in a pupil’s mind (perhaps just as well…). There is however some very interesting work in the field of cognitive research about how the mind works that could be helpful in teaching complex subjects such as economics.

Taking supply and demand as our example I should like to look at one area of cognitive research, working and long-term memory and their role in knowledge acquisition and skills development.

‘Memorisation is the royal road to disaster in economics’ – so said R G Lipsey, author of the legendary Principles of Economics, which several generations of economics students ploughed their way through. But on this Lipsey wasn’t entirely correct. Simply trying to memorise the entire economics syllabus is not the best A level technique, but cognitive theory shows us that some memorisation and repetitive practice is actually vital to analyse and evaluate effectively. Moreover, memorisation and practice don’t have to be dull!

Recently in education there has been a false battle between “bad” learning and memorising facts and “good” analytical and creative skills. However, Dan Willingham and others make what should be an obvious point. In order to think/analyse/create we have to have something to think about. Willingham’s research shows that the key to developing analytical expertise is to build up the long-term memory banks of the building blocks of subject knowledge so that the working memory, which cannot hold very much information at any one time, can selectively access this information to solve problems.

For example, any economics graduate can draw supply and demand graphs in their sleep with little or no conscious thought (and I for one have done so in some Monday morning lessons!) and far from being a bad thing this is an efficient use of my brain’s resources because it allows me to spend my precious mental energy on using this stuff to analyse and problem-solve. The key to all that wonderful analysis is to have the basic nuts and bolts of the subject tucked away in my long-term memory.

Application to teaching of Demand and Supply

As economics teachers are so familiar with demand and supply analysis, it is easy to underestimate just how complex and abstract it is for the beginner. What follows is a suggested approach, but other approaches can also be taken. What matters is using a technique that makes sure the basic concepts are thoroughly embedded in long-term memory and this is best done by repeatedly accessing the concept and thinking about it and is far more productive (and interesting) in terms of getting stuff into long-term memory than simply learning the diagrams.

Start with Demand and explain that you are drawing a relationship between price and quantity on the assumption that no other factors influence demand. Students are usually happy to agree that the relationship is inverse and accept that we can deal with any exceptions to this later. It is not a good idea at this stage to delve into the deeper derivations of the demand curve and its relationship to marginal productivity. Nor is it a good idea to pretend to derive a demand curve from real life data because actually, as in real life you can never hold other factors constant.

At this point it is worthwhile explaining what a two axis diagram actually does i.e. that any line on it must be showing a relationship between the variables on the vertical and horizontal axes and so movements ALONG such a line can ONLY refer to these two variables. It is surprising how few students really understand this, especially if their maths knowledge is shaky. Cognitive science has found that one of the best ways to get something embedded into long-term memory is to keep dragging it up into working memory and actively thinking about it. It thus follows that we should keep revisiting this idea of what a movement along the demand curve means as each re-visit strengthens the permanence of the knowledge.

When teaching the other variables (income, tastes, complements and substitutes), it is vital to re-visit the ‘what does a demand schedule show?’ – answer ‘the relationship between price and quantity’ question. As this reinforces the learning and then becomes the natural bridge to showing that changes in anything else have to be shown by movements of the curve. Again, it really matters that they think about why this is the case as this will help to cement the knowledge and again it matters that this distinction is revisited in subsequent lessons, because dredging stuff out of long-term memory, pondering it and using it, helps it stick and makes it easier to recall next time. The same principles can be applied to teaching supply.

Then comes the moment when we put them together and it is at this point that students often make mistakes and end up confusing movements along with movements of curves. They will do this far less if they are reminded of the basic quantity/price relationship and asking the question about that relationship at the beginning of the lesson, where you combine demand and supply for the first time.

It is also important to work through the sequence of cause and effect, so in diagram A there has been a DECREASE in income, this has caused a DECREASE in demand from Q1 to Q2 and the demand curve to shift left thus CAUSING a decrease in price from P1 to P2 and thus a shift ALONG the supply curve to the new equilibrium of P2Q2.

Diagram A

As the teaching progresses by adding layers of complexity so that students learn to identify and show all the changes that can occur on both the demand and supply side and their outcomes, it is important to keep revisiting the basic knowledge building block of the distinction between movements of and movements along the curve and the rationale for it. Teachers can find their own methods for this but I have found that if students expect they can be asked at anytime to draw a demand and supply analysis, this can encourage them to get it into their heads. I have sometimes handed them a board marker at the beginning of a lesson and said ‘Draw the effect of an increase in pocket money on the chocolate market’ or something similar and even asked them around school (no-one expects the Unbalanced Economist…) ‘What is the only thing that causes a movement along a demand curve? Why?’ Making it a game and low stakes helps i.e. getting it wrong in the classroom or corridor is not a big deal, learning why you got it wrong and improving is what matters. Subsequently students mostly get to the stage where it is automatic and correct, plus they feel a sense of achievement when they get there. This has three clear benefits:

  1. They’ve learned a basic economics building block and can thus answer easy questions
  2. Their memories are freed up to learn other stuff as this block is automatic (like changing gear for an experienced driver, you don’t think about it)
  3. They are now able to concentrate on the analysis and complex stuff because they aren’t wasting energy trying to work out which way to move the curves or how to label the diagram.

Other areas of building blocks can be approached in the same way – the important thing is to get the building blocks embedded and the way to do it is to break it down, learn it and keep accessing it to think about something. So, for example, price, income and cross elasticities can be broken down by explaining that in each case we are looking at how much demand alters when another variable changes so that is why % change in quantity demanded is always on top of the formula and the thing being changed is on the bottom. Learn it and the reason for it and keep accessing it at unexpected moments until it’s automatic. But I’ve strayed into another lesson now…

Bibliography:

Daisy Christododulu: Making Good Progress

Dan Willingham: Why Don’t Students Like School

Dan Willingham: When Can You Trust the Experts?