Starting Point: Teaching and Learning Economics > Teaching Methods > Interactive Lecture Demonstrations > Interactive Lecture Demonstrations in Economics > Types of Demonstrations in Economics

Types of Demonstrations in Economics

Classroom experiments

Economics instructors have access to an extensive set of appropriate classroom experiments that allow students to see economic concepts in action. These experiments can benefit from the Interactive Lecture Demonstration format. Before taking part in an experiment, students can predict the outcome so that attention will be focused on the main concept to be learned. Reflection after the experiment can help students appraise what was learned and transfer this understanding to other contexts.
In the double oral auction, students take on roles as suppliers and demanders. Prior to running the experiment, students can make a prediction, choosing from several sets of distributions for prices--diverging distribution, movement toward bimodality, movement toward an even distribution, and movement toward one price. After running the experiment, students can assess the accuracy of their predictions and why movement toward one price occurred.
More examples of economics classroom experiments

Classroom surveys

Survey data from students' own lives can show the application of economic concepts. For example, informal, in-class surveys provide data for graphical models such supply/demand curves, elasticity or Lorenz curves and underscore the real world basis (and limitations) of these concepts. Because everyone's data is needed, surveys involve all students. And, because the outcome is not predetermined, surveys create a sense of uncertainty that may be absent in textbook presentations. The Interactive Lecture Demonstration format focuses student attention on the underlying concept, often revealing contradictions between student prediction and what the data actually show.
Prior to a survey of household income, students predict the Gini coefficient for the class: will it be higher or lower than the Gini coefficient for all US household? Then, based on data collected in a confidential survey, students calculate income shares by quintile, draw a Lorenz curve and estimate the Gini coefficient for the class. Finally, students compare and evaluate their predictions and the estimated Gini coefficient.

Surveys can be conducted by small groups of 3 - 5 students, or surveys can be conducted for the entire class, and then analyzed either as a whole class or by small groups. Examples of surveys used in econ courses.

Data analysis

Analysis using data is most effective if the data show a surprising result. For example, students can analyze macroeconomic trend data or Census data by gender, race and income. In the Interactive Lecture Demonstration format, students predict what the data will reveal, analyze the data, and then reflect on why their prediction was correct or not, preferably referring to economic models.
A data analysis Interactive Lecture Demonstration can be a short activity, for example, asking students what has happened to average well-being as measured by real GDP/capita during their lifetime. For this and other data analyses, present students with a series of graphs over time showing linear versus non-linear growth or decline, or cyclical options. In this way, students will be required to make a more sophisticated prediction than "it will go up," and students will gain practice with mathematical representations.

Data analyses can be relatively straight-forward, asking students to graph or otherwise manipulate a given set of data, while more sophisticated data analyses may require students to find data on their own or to conduct statistical analyses.
Small group work can help students work efficiently. By sharing explanations and calculations with others, students frequently self-correct mathematical and graphing errors that could block successful completion of the assignment. More skilled students who might have been able to complete the work on their own will benefit by explaining their understanding to other students. The cooperative learning research literature recommends instructor-assigned groups of 3 - 5 students with written instructions so that groups work more efficiently, and so there is individual accountability for all group members.


Classroom instructors often ask "what if" questions that are then answered by a simulation. [add link here to simulations module when live] The Interactive Demonstration approach can be used to engage students in this analysis, first asking them to make a prediction, including, if possible, a description of their underlying economic model, even if it is not well specified. The simulation demonstration will offer concrete results, prompting the student to revise or make for specific their prior view.

For example, in answering the question "What will happen to job creation if government spending increases?" students may answer: jobs will increase because there is more money, or, there will be no increase because the government will need to raise taxes. Follow-up work with a simulation or a model, will help students clarify the underlying issues.

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