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

Interactive Lecture Demonstrations in Economics

The Interactive Lecture Demonstration is designed to help students learning core concepts in economics using a classroom activity that may be an experiment, a survey, a simulation or an analysis of secondary data. The activity creates a motivation for students to learn economic analysis presented in a follow-up lecture.

The Interactive Lecture Demonstration differs from most classroom activities such as economic experiments in that it follows a framework in which students:

Why use Interactive Lecture Demonstrations?

Interactive Lecture Demonstrations are an effective way to help students learn fundamental economic concepts because:
  • In economics, many concepts are counter-intuitive or defined in a manner different from their colloquial usage. For example, most people misperceive the effect of economic growth (Christandi and Fetchenhauer 2009).
  • Students are unlikely to change naive understandings unless they recognize their prior thinking, even if it is partially or entirely incorrect.
  • In order to change their understanding, students often need to engage in an activity such as those offered by the demonstration.
  • Students are more likely to retain what they learned if they first reflect on how their new understanding differs from their initial viewpoint.
    Learn more about the research evidence on the effectiveness of Interactive Lecture Demonstrations

How to use Interactive Lecture Demonstrations in economics

Which courses?

Interactive Lecture Demonstrations are used most often in principles courses. However, the Interactive Lecture Demonstration approach can also be used in more advanced courses involving data analysis that may benefit from careful attention to the prediction, experience and reflection steps.

Choosing a demonstration

Challenges and insights

  • In the prediction step, students need to be able to make a reasoned estimate and not simply guess at random. Therefore, it is often best to ask for a rough estimate such as "Much more, more, etc.," "Greater than 1; less than 1 etc.," or have students choose from a list of possible outcomes. At the same time, the prediction should have significance, perhaps tied to a policy decision or other important consequence.
  • The prediction step offers an opportunity to help students with graph-interpretation skills. Many problems can be posed as a choice between several graphs (for example: up, down, linear, non-linear).

  • Interactive Lecture Demonstrations create a "time for telling" in follow-up lectures. It may be tempting to tell the students the correct answer–and students may prefer simply to hear what they are expected to repeat on an exam. However, research on learning shows that students will be better able to transfer their understanding to new contexts if they first connect new ideas to their prior viewpoint and if they reflect explicitly on this new learning before listening to the instructor's explanation (Schwartz and Bransford 1998).

    What is money? An Interactive Lecture Demonstration example.


    Students–and the general public–often misunderstand what money is, defining it too narrowly as coins and currency, or too broadly as all wealth. In the "What is money?" Interactive Lecture Demonstration, students predict which items on a list are money, and then through a class survey, they identify which items are, in fact, money. Finally, they reflect on why money is often misunderstood.

    The Reflection Step:
    In the What is money? Interactive Lecture Demonstration, it might be easy for students to memorize the definition of M1, but using the What is money? Interactive Lecture Demonstration provides a deeper understanding by challenging students' initial (and likely strongly-held) viewpoint. In the final step, students think about their own thinking, reflecting on difference between everyday use of the word "money" and its technical meaning in economics.

  • The reflection step can help students generalize the newly-learned concept by applying it in a variety of contexts; the Interactive Learning Demonstration should not end when students can give the correct answer to the problem originally stated. Consider a context-rich problem as a way to help students transfer their understanding to a different context.
    After completing the Interactive Lecture demonstration "What is Money?," ask students to consider the babysitter problem: Imagine that you are living in a large group house with many people. In order to keep the house clean, each person is assigned a job. But to allow some flexibility, people are allowed to do a job for someone else and be paid a certificate worth "one job." Everyone was given one of these certificates when they joined the house. Now you find that no one is doing the work for someone else; people are holding on to their certificates. What do you suggest for the house to do to encourage people to use the certificates?

    Economic examples

    See ready-to-use examples of Interactive Lecture Demonstrations.

    When you've created a good interactive lecture demonstration, please consider sharing your example on the Starting Point site. All submissions are peer reviewed before posting.