Exploring Easter Island Economics with Excel
Students learn far more from doing than from viewing. By seeing relationships that they have developed themselves, by diagraming those relationships themselves, students learn far more than merely reading over what someone else has done. It is argued that especially for the dynamic problems encountered in environmental and resource economics, Excel has a comparative advantage as a learning aid. We develop a simple, flexible Excel assignment to illustrate the Brander and Taylor (1998) model of the Easter Island economy. Brander and Taylor argue that on Easter Island a crucial natural resource, the island's palm forest, was an open-access (res nullius) resource, leading to over harvesting and eventual societal collapse. Brander and Taylor's simple model showing the interaction of human population with a renewable resource, a forest, mimics what is known about the human population and forest from archaeological evidence.
The open access institutional protection of renewable resources is illustrated by a simple diagram of population and resource stock over centuries, a model much like ordinary predator-prey models in biology. Variations on the basic Brander and Taylor model, such as changes in propoerty rights institutions and/or changes in technology, based on published work in the literature, can be explored and compared to the original Brander and Taylor results of boom and eventual collapse.
Brander, J.A. and M.S. Taylor (1998). The simple economics of Easter Island: A Ricardo–Malthus model of renewable resource use. American Economic Review
Context for Use
Description and Teaching Materials
Teaching Notes and Tips
Students sometimes are less familiar with the use of spreadsheets than we might think. You might find that the activity requires a bit of your time in going over the basics of spreadsheets, from creating formulas to copying cells. Some of these are noted in the text.
Also, not all students are willing to do their own work. Two approaches to this are a) give in and make it a group assignment and b) individualize the assignment, especially by offering specific variations from the basic model for comparitive purposes. Even group assignments will not avoid possibly unwanted collaboration among groups. This can be handled with individualizaiton of the assignment.
The assignment should be spread out over a large part of the term, with first reading and discussing sections 2 and 3 of the "Exploring Easter Island..." paper. Section 4 of the paper provides instructions for simulating the basic model and some discussion of variations.
References and Resources
Also see http://serc.carleton.edu/econ/spreadsheets/index.html for a module on teaching economics with spreadsheets at the "Starting Point" Project. The main contributors to this "Starting Point" project are listed as
Miles B. Cahill (College of the Holy Cross)
Humberto Barreto (Depauw University)
Semra Kilic-Bahi (Colby-Sawyer College) and
David Schodt (St. Olaf College)
Significant material on these pages are attributed to Cahill's work with George Kosicki.