Women and Competition: Do Gender Differences Matter In the Classroom?

More economics in the news is good for economics instructors. At their best, stories with economic content can engage student interest. The linked New York Times story made a big splash today.

Two economists, Muriel Niederle: Department of Economics, StanfordUniversity and NBER, and Lise Vesterlund, Department of Economics, University of Pittsburgh, experimented with competitive responses by males and females. Not surprisingly, they found a number of significant differences in the way men and women respond to competitive situations. Let them put their conclusions in their own words:

In this paper we examined an environment where women and men perform equally well, and where issues of discrimination, or time spent on the job do not have any explanatory power. Nonetheless we find large gender differences in the propensity to choose competitive environments. We feel that the effects we discover in the lab are strong and puzzling enough tocall for a greater attention of standard economics to explanations of gender differences that so far have mostly been left in the hands of psychologists and sociologists.

I want to use the conclusions of the Niederle and Vesterlund paper to tentatively explore the implications for teaching and learning in the economics classroom. Niederle and Vesterlund refer to women leaving science and engineering, thusly:

There is indeed evidence that, for example, the decision of women to quit sciences and engineering is not primarily due to ability. For example, a report entitled “Women’s Experiences in College Engineering” writes that “Many young women leave […] for reasonsother than academic ability. These reasons can include their negatively interpreting grades that may actually be quite good, diminished selfconfidence, or reluctance to spend all of their waking hours ‘doing engineering.’” (Goodman, Cunningham and Lachapelle 2002). The report mentions that many women that left mentioned negative aspects of their schools’ climate such as competition, lack of support and discouraging faculty and peers. Similar effects have been found by Felder et al (1994).

It seems therefore that decisions of women to remain in male-dominated areas are not driven by actual ability only. In natural settings issues such as the amount of time devoted to the profession, and the desire of women to raise children may provide some explanations for the choices of women.

These conclusions, you may recognize, are the similar to those that got Harvard President Larry Summers in trouble a couple of months ago. I applaud the fact that the paragraph immediately above is in the paper. However, the insights of Professors Niderle and Vesterlund don't address gender differences in response to teaching methods and styles.

What I'm getting it is that I'm still in the dark about how to create a classroom environment that appeals to female students and male students equally. The reason for raising the issue relates to my previous post on The Royal Economics Academy about the AEA's efforts to increase the number of women in the economics profession. Women students, at least in my classes, perform as well or better than the males. Nonetheless, the number of females moving on to economics majors and careers in economics lags behind what I would expect. I hate to end a post with a question, but I must. Why the gender difference?

QuickTake: The FOMC's Calendar

A useful tool when teaching monetary policy is the FOMC calendar page. Just follow the link in this post and then click on the FOMC press release or the minutes of the FOMC meeting of your choice. We teach monetary policy in an abstract way, but seeing the actual minutes of an FOMC meeting makes monetary policy more concrete.

QuickTake: The IDEA Paper Series

The IDEA Center is up to #42 in their series of papers on teaching and learning. While these papers are not specifically directed toward the teaching of economics, they offer solutions to many of the problems economics instructors deal with in terms of class management, motivating students, etc. Each paper is short and practical. Highly recommended.

Free Online Book: How People Learn

How People Learn is one of the best free online resources for instructors, and parents for that matter. Among instructors, t's not just economics faculty who will find the book useful. Any instructor, no matter his or her field of instruction, will be mesmerized by learning about how students learn.

The book is also available in a print version, which would be easier to read and thus justify the $22.45 price. The interface between the reader and the book in the online version is awkward because the book is provided in html format rather than a pdf. (A pdf version can be purchased.) That said, and even though a good bit of the book's context involves children, this is a worthwhile resource for all college faculty.

EcEdWeb: An Award for an Excellent Resources Page

The Royal Economics Academy excellence award

The University of Nebraska at Omaha's Economic Education Web page (EcEdWeb) has been online for 10 years now. I've provided a link to the homepage, but once there you'll probably want to click on the link that says College Teach. I counted well over 100 clickable links to online resources useful to economics instructors. That makes EcEdWeb the most comprehensive resource page I've found yet. I'll be reviewing some of these links in future posts. Thanks, EcEdWeb for helping improve the quality of economics instruction.

Quotable Ideas for the Economics Classroom

From the AACSB e-newsline B-school quotables page come these thoughts:

Leaders must inspire change from the top. Success happens in the minds of people and you can have all the systems in the world, but if you really want to have change it must happen in the minds of your people.

Woodroffe said if companies were to become more entrepreneurial, they had to be willing to accept failures.

The one thing that's common to entrepreneurs is that really successful people don't go around succeeding all the time. Sometimes they fail.
--Simon Woodroffe, founder, Yo! Sushi UK restaurant chain, speaking to an audience at the University of Auckland Business School

Running a classroom is like running a business in some ways. Instructors must be leaders. Change must happen in the minds of your people--your learners. Sometimes you fail.

Yep, no wonder that former teachers sometimes go on to success in the business world. We've seen all the things that can happen in the economy happen in the classroom.

Economics 101 classes probably don't pay enough attention to entrepreneurs and entrepreneurship studies. Yes, we teach that there are four resources, land, labor, capital, and entrepreneurship, then quickly move on to the concept of production possibilities and its graphs.

Since entrepreneurs are such interesting people, it wouldn't be a bad idea to spend a bit more time discussing them. A good way to break the ice on this topic is to survey students about their plans for future businesses, followed up by questions about the qualities of successful entrepreneurs.

Hot on the Heels of the Apprentice Comes The Scholar

It's easy to see the similarities. A group of attractive youths compete for a prize worth $250,000. While The Apprentice offers star power in the fleshy form of Donald Trump, while The Scholar offers offers insights into academic excellence.

In looking over the Web site for The Scholar I didn't see a contestant express an interest in pursuing an economics major, but then again does anyone ever enroll in college as an economics major. My impression is that students are exposed to economics and a handful of them are drawn to it and change their major.

The Economics Department at Indiana University offers a web page that sketches the benefits from majoring in economics. Dr. Martha Olney has this page, which has graduates with economics degrees writing about their experiences. Valpariaso University offers this excellent pdf informing prospective economics majors about career opportunities.

My advice: Direct only the best students in your Econ 101 classes to these materials. Economics isn't the easiest subject in the world!

QuickTake: Ask Dr. Econ

Another winner from the San Francisco Fed: Ask Dr. Econ. The good Dr. can't answer all questions, but he/she posts answers to selected questions. I'll be putting up a link to Ask Dr. Econ on my class WebCT resources page.

QuickTake: The Economic Letter

The San Francisco Fed has a nice bimonthly Economic Letterthat can be useful in teaching current economic issues. The level is about right for an Economics 101 class.

QuickTake: The Current Account Deficit

The Atlanta Fed has a nice article on the deficit in the current account. This would make a nice supplement to textbook coverage of the topic.

Teaching as Leadership

What are the characteristics of a good teacher? If you believe that good teaching requires servant-leadership, then ponder:

The Ten Characteristics of a Servant-Leader
1. Listening
2. Empathy
3. Healing
4. Awareness
5. Persuasion
6. Conceptualization
7. Foresight
8. Stewardship
9. Commitment to the growth of people
10. Building community

Visit the Greenleaf Center for Servant-Leadership for details on how to put these characteristics into action.

Where are the Women Economists?

I found two items next to each other on the UBDaily newsletter today. One item linked to an NPR audio file discussing efforts to increase the number of women in the sciences, the issue that got economist and Harvard President Larry Summers in trouble. The second was also a link to another NPR audio file, this one discussing the fact that the majority of college graduates these days are female. Putting 2 + 2 together and arriving at 4, I shouted "Eureka!" If more women than men are graduating from college these days, then ceteris paribus, the relative number of women in the sciences can't do anything but increase. Imagine all the grief Larry Summers could have avoided had he realized this implication in the data!

The American Economic Association has long concerned itself with increasing the number of women economists. The Committee on the Status of Women in the Economics Profession (CSWEP) is the vehicle by which that concern expresses itself. Here's some of the Committee's work:

CSWEP was the moving force behind the establishment of a child-care program at the annual AEA meetings and, with NSF support, organized a successful mentoring program at the national and regional levels in 1998. With new funding from the NSF, CSWEP launched another mentorship initiative in 2004. The first set of workshops were held immediately after the January 2004 ASSA meetings in San Diego. There will be a second set of national workshops in 2006, as well as one mentoring program at each of the regional association meetings.

I don't have any data telling me how successful the Committee's efforts have been. When I was in college, most of my English teachers were women and most of my economics teachers were men. From what I can see at the meetings, there are still a lot of male economists, but more women than when I was in school. As for the teaching of economics, I don't know what role gender plays. I've found an article that might give me some answers: "Gender and the Study of Economics: The Role of Gender of the Instructor." Journal of Economic Education. v30, n1 (Winter 1999): 3-19. If I find definitive answers while reading the article, I'll share them with readers of this blog.

Controvery in the Classroom--A Remedy Worse than the Problem?

From USA Today comes the linked story about efforts by 14 state legislatures to shape classroom discussion via proposed legislation. Since economics is about choice, just about any topic might come under discussion in the economics classroom. Who's to decide what's legitimate?

Let's take a quick look at the legislative proposals:

Though proposals vary slightly from state to state, core principles remain the same. In Ohio, for instance, a bill would bar faculty or instructors from "introducing controversial matter into the classroom or coursework that has no relation to their subject of study and that serves no legitimate pedagogical purpose." Ohio's state colleges and universities would also have to create "a grievance procedure by which a student, faculty member, or instructor may seek redress for an alleged violation."

To be a professional in the classroom means understanding Socrates when he said, "I cannot teach anybody anything, I can only make them think." Some instructors might corrupt this educational philosopy to read, "If I make them think, they will think like me." An instructor might consider it a personal failing if students haven't come around to his or her way of thinking. That's confusing the outcome with the process. Contrast it to the Socratic perspective, which emphasizes the value in the process of student discourse.

There is a simpler solution than state legislation, grievance panels, and the whole bureaucratic jungle that both faculty and students will have to navigate if legislation is enacted. First, those few faculty who lack professionalism and thus let personal feelings toward students' beliefs influence their grading need to read their teaching surveys more carefully. Students do not care for such nonprofessional behavior. Many will and should avoid taking classes with such instructors. That's the market for information making for an efficient outcome. Second, a grading rubric can contribute to the amerlioration of the problem. A rubric spells out in great detail what factors will influence a student's grade. Every class should have a well defined rubric as part of the syllabus so that students will know how their grades will be determined. If those nonporofessional instructors insist that students agree (or pretend to agree) with their point of view or be penalized, then let them put it writing as part of the rubric.

In economics, rubrics are especially important since so many current events and theories involve belief systems. Ever seen a neoKeynsian and a monetarist go at it? I feel for the aggrieved students who have complained about their inability to express themselves freely in the classroom or who have been penalized by lower grades because their thinking did not match that of their instructors. Fair grading and a fair hearing of everyone's views is the least that students have a right to expect in exchange for their hard-earned tuition dollars.

Cantillon's Paradise: A Student's Economics Blog

Next fall I'm going to have my students create their own economics blogs. They'll be required to post weekly to their blogs. As far as I know I'll be the first economics instructor to require students to blog. I'm aware of a few English instructors requiring blogs, but no economics instructors, so I'm not quite sure how good an idea this is. In future posts I'll discuss the rubric and other dimensions of that course assignment, but this post is about an exemplary student economics blog, Cantillon's Paradise. Click on the title of this post and pay it a visit.

Why is Cantillon's Paradise exemplary? Consider the title. Student blogger David Skarbek obviously spent some time coming up with it. Just from the name of his blog, you know a lot about Mr. Skarbek's economics. Then there's the frequency of his posts. I don't know Mr. Skarbek, but I would assume that like most students he stays busy with his courses, his part-time job, his friends, family, and other interests. Yet, he posts a steady stream of items to his blog. Good for him!

The quality of the posts are excellent. The latest as of this writing, Mill on Theory, is a good example. The style is authentic, the thoughts clearly expressed and well developed. The previous post, Wine, offers readers Mr. Skarbek's analysis of the recent Supreme Court decision striking down state laws banning direct-to-consumer interstate wine shipments. I dare anyone to find a better written or more thoughtful analysis of the reasoning behind the existence of those laws. I would suggest the New York Times or other mainstream media pick that post up and run it as an op-ed piece.

I'll have my students take a look at Cantillon's Paradise next fall. I'll also let them know that I expect them to make every effort to match its quality. In the meantime, I hope David Skarbek continues to find the time to keep blogging. With all the noisy drivel and ranting in the blogosphere, it was a good day when I happened upon the quiet reasoning in Cantillon's Paradise.

Don't Miss Cantillon!

Mark Thornton has done an admirable job of filling in a gap in my economic knowledge. Like many Ph.D. economists of my generation, my undergraduate schooling consisted of Keynesian economics a la McConnell, spiced with a bit of Alvin Hansen and other admirers of Keynes.

When I entered the doctoral program at Tulane University it was a revelation to discover that other schools of thought existed. Still, I managed to make it to a doctoral degree without ever having heard of Richard Cantillon. Since my electives were in other areas, I never took a course in the history of economic thought. Now I wish I had because I've clearly missed something. Click on the title of this post and you can read Dr. Thornton's article yourself. The brief outline of Cantillon's incredible life is alone worth your time.

Every Economics 101 course rightly mentions Adam Smith and the invisible hand. Of course, Keynes and the General Theory are also usually covered, at least minimally. I'm more concerned with what Economics 101 students are not learning. My text, unlike many others, mentions the Austrian school and Mises, albeit briefly. Because of the Mises Institute at Auburn University, I can type in a link to their web page on the computer at my classroom teaching station and show students the modern incarnation of Austrian thought.

Now, I can also mention Cantillon. It seems that we have Cantillon to thank for being the first to articulate the concept of opportunity cost. Cantillon's examples, presented and discussed by Dr. Thornton, are fresh and easy to understand. Cantillon may not have gotten his due in my undergraduate education, but I'll fill in the gap for my students. Perhaps other economics instructors would like to join me.

Dr. Yoram Bauman--Economist, Comedian, A Man for All Seasons

I love Dr. Yoram Bauman's Small Party web site. There's plenty of food for thought for economics instructors throughout. On his humor page, I found a link to this parody of Mankiw's 10 principles. Check out Yoram's web page and read the explanations for his translations. There is a keen intellect at work here, so don't let the silliness fool you.

Mankiw’s Principles

#1. People face tradeoffs.
#2. The cost of something is what you give up to get it.
#3. Rational people think at the margin.
#4. People respond to incentives.
#5. Trade can make everyone better off.
#6. Markets are usually a good way to organize economic activity.
#7. Governments can sometimes improve market outcomes.
#8. A country’s standard of living depends on its ability to produce goods and services.
#9. Prices rise when the government prints too much money.
#10. Society faces a short-run tradeoff between inflation and unemployment.

------------------------------------------------------------

Yoram’s Translations

#1. Choices are bad.
#2. Choices are really bad.
#3. People are stupid.
#4. People aren’t that stupid.
#5. Trade can make everyone worse off.
#6. Governments are stupid.
#7. Governments aren’t that stupid.
#8. Blah blah blah.
#9. Blah blah blah.
#10. Blah blah blah.

The Dead Grandmother/Exam Syndrome--What Can Instructors Do?

Here at The Royal Economics Academy the Provost issues a warning to the faculty each semester. That warning reminds the faculty to consider the fact that exams are hazardous to the health of students' grandmothers.

The Provost's memo is grounded in solid research, published by Mike Adams of Eastern Connecticut State University in 1999. His paper The Dead Grandmother/Exam Syndrome is a classic in the literature. Furthermore, the faculty members I know confirm his results through their own experiences. With every exam that comes around, more grandmothers die.

Since academic freedom is a cornerstone of the charter that created The Royal Economics Academy, our Provost chooses not to dictate how faculty should respond to the dead grandmother/exam syndrome. Some of my colleagues have decided to stop giving exams altogether, thus saving the lives of hundreds of grandmothers around the world. Other faculty members put a requirement on their syllabi that makes students sign an oath promising to keep their enrollment at the academy a secret from their families. The problem with this approach is that sometimes family members get nosy, investigate the whereabouts of a student, and are shocked when they discover that Susie or Sam is in college.

Economics instructors everywhere need to remember grandmothers as they schedule exams. Give as few exams as possible to keep the death toll among grandmothers down. In my experience, exams that contain math are especially deadly. Eliminate the math. The grandmothers of the world will thank you.

Brain Research and Economics Instruction

This article from Scientific American provides a wealth of information about recent findings relating to male-female differences in the brain. The implications for economics instruction are not clear, yet when I read the article my first thought was that economics instructors need to find ways to make economics appealing to both sexes.

Since this post is a QuickTake, I'll just copy and paste a few intriguing statements from the article:

These anatomical differences might well relate somehow to differences in the way males and females navigate. Many studies suggest that men are more likely to navigate by estimating distance in space and orientation ("dead reckoning"), whereas women are more likely to navigate by monitoring landmarks.

Even the neurons in the hippocampus behave differently in males and females, at least in how they react to learning experiences.

The more we discover about how brain mechanisms of learning differ between the sexes, the more we may need to consider how optimal learning environments potentially differ for boys and girls.

That last statement deserved the bold, which I put on it.

I have to warn you that if you read the article, you'll learn more about rat brains than you ever wanted to know. My purpose is to remind instructors that male and female brains do differ and that's going to make a difference in their reaction to the subject matter and the way it's presented.

Assessment--You Have to Measure Something Meaningful

Florida is best known as the home of palm trees, hanging chads, hurricanes, and missing children. It is also the home of Hillsborough High, the nation's 10th ranked high school according to Newsweek magazine. If the state of Florida ranked schools, the school would likely be a wee bit lower in those rankings. You see, Hillsborough High received the grade of D in an assessment performed by the state. How can these differences in the performance of the school be reconciled? There is a lesson for instructors.

The linked story tells us that

The Newsweek list is based on a single factor: the number of Advanced Placement and International Baccalaureate tests taken by all students at a school, divided by the number of graduating seniors. The students don't have to do well on the tests either. It matters only that they take them.

Test scores? No.

Graduation rates? Nope.

Closing the achievement gap between whites and minorities? Forget it.

Unsound assessments are performed all the time. Take the example of student self assessment. A student predicts an A on the next exam after answering all questions correctly on a self test that the student created. The problem is that the student's questions are all at the first level in Bloom's taxonomy, requiring only that the student recall definitions.

Sound assessments measure at least four abilities: comprehension, interpretation, analysis, and synthesis. I'll discuss the question of how to create sound assessments in economics classes in a follow up post later this month.

Constructivist Learning: A Hands On Assignment--The Microsoft Antitrust Case

I've copied and pasted an assignment that I gave my Honors Micro Principles class this semester. It embodies constructivist learning principles, which are discussed in my other blog Socrates Technological University. Readers of The Royal Economics Academy can use this assignment provided attribution is given to the author.
__________________________________________________

You Be the Judge! The Microsoft Antitrust Case

Sections I. through IV. provide information that will be useful in completing the assignment. Section V. poses questions for you to answer in parts a. through d. You will be working with your group in arriving at answers. The actual assignment isn’t that long, but it may take some time to wade through the background in the Microsoft case and the provisions of antitrust law. Four links are provided in case you would like to do more research on the case.

http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm

I. The above link will take you to the U.S. Department of Justice web site to the Findings of Fact in the 1999 Microsoft case. This is a long document. You don’t need to read it in its entirety, but you might take a quick look to get the flavor. I’ve copied and pasted item 34:

34. Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows.

Here is item 63:

63. Finally, it is indicative of monopoly power that Microsoft felt that it had substantial discretion in setting the price of its Windows 98 upgrade product (the operating system product it sells to existing users of Windows 95). A Microsoft study from November 1997 reveals that the company could have charged $49 for an upgrade to Windows 98 — there is no reason to believe that the $49 price would have been unprofitable — but the study identifies $89 as the revenue-maximizing price. Microsoft thus opted for the higher price.

Here is the last item, item 412:

412. Most harmful of all is the message that Microsoft's actions have conveyed to every enterprise with the potential to innovate in the computer industry. Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products. Microsoft's past success in hurting such companies and stifling innovation deters investment in technologies and businesses that exhibit the potential to threaten Microsoft. The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest.

II. The following link will take you to the text of several of the antitrust laws:
http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm

Since Microsoft was charged with violating sections 1 and 2, I have copied and pasted them here:

§ 1 Sherman Act, 15 U.S.C. § 1
Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

§ 2 Sherman Act, 15 U.S.C. § 2
Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

The Sherman Act is not very specific, is it? How can a company tell is if it is violation? Well, I guess keep up with the case law.

III. The Final Judgment of the court, rendered in 2002, is stated in this document, which has many specific provisions:
http://www.usdoj.gov/atr/cases/f200400/200457.htm

IV. The following link contains a 2005 status report on Microsoft’s compliance with the court’s decision:
http://www.usdoj.gov/atr/cases/f207200/207283.htm
The court will be monitoring Microsoft’s efforts to comply, and its behavior through 2007, I believe.

V. As you can see, an antitrust case plays out over a significant period of time. There were two critical elements in the court’s decision that we talk about in economics, but don’t spend much time applying. One of these relates to the question, “What is the market?” The other is a related question, “What are the substitutes?” For example, is beer a substitute for coffee? If it is, then the market would be the market for beverages. If it’s not, then the beer market and the coffee market are two separate markets.

a. From your perspective as a consumer who uses computers and software, how closely do you think Microsoft fits the textbook model of a monopolist?
b. Microsoft products include Windows XP and Internet Explorer. From your perspective as a consumer, what do see as the substitutes for Microsoft products? Do you personally use any substitutes for Microsoft products?
c. Do the facts in item #63 (copied above) surprise you? Should firms be punished for charging the “revenue-maximizing price”?
d. At the time this case was in court, the talk was that Microsoft was going to broken up into two different companies: one company would create operating systems and the other company would create word processing software, web browsers, games, etc. That radical punishment was not meted out by the court. I am guessing that there are economies of scale that would be lost if Microsoft were to be broken up. Explain briefly.

Instructions: You should contribute at least two postings to a group discussion designed to arrive at answers to the questions in a. through d. Since none of us has training in the fine points of antitrust law, you are to discuss from the perspective of a student who has read the material on antitrust in the book and the material about the case contained in this document.

An Award for an Excellent Resources Page

The Royal Economics Academy Excellence Award

The Department of Economics at California State University in Fullerton has created a homepage that would help to interest students who may be thinking of majoring in economics. I like the message the pictures of the faculty-student potluck dinner sends to learners. I also like the data page, with nice links to various resources that economics instructors will find useful.

QuickTake: A Failure to Teach the Whole Story?

Gil Guillary has a nice post (May 5, 2005) on the Mises blog, titled What are You Calling Failure? The points he makes in the post are ones that economics instructors might want to make when teaching the standard textbook pablum on market failure.

QuickTake: An Online Currency Converter

A good way to engage student interest in exchange rates is to utilize an online currency converter. There are many of these on the Internet, including the one at itools linked in this post. I like to show students the conversion of the dollar into the euro, the peso, the Canadian dollar and several other currencies before launching into an explanation of how the exchange rates are determined.

Economics as the Foundation of the Gestalt

No word play intended, but William F. Sharpe is a pretty sharp guy. Professor Sharpe, 1990 Nobel prize winner in Economics, writes, “. . . one needs a gestalt from which to make business judgments.” To put it another way, the whole is greater than the sum of the parts, and business people had better darn well know it. The issue is how can colleges and universities instill in students the gestalt they must possess to make sound business judgments.

I'm glad to see that a Nobel prize winner and I agree on the prime importance of economics in creating the gestalt. Critical foundations of the gestalt include microeconomics and macroeconomics. In most syllabi the goal is listed as "the economic way of thinking." Sharpe notes that the micro and macro contexts of business are not very likely to be front and center in a business environment. In short, business leaders must master the economic way of thinking in school or risk forever missing the key elements in the creation of gestalt.

Let me use an analogy. I've never had the patience to put together a jig-saw puzzle, but I can imagine how it's done most effectively. I would pull out all the pieces with straight edges and then begin to build the outside edges of the puzzle. I'd pay attention to colors in order to mate adjacent pieces of the puzzle. I'd use the picture on the box the pieces came in as a guide. For example, if the only thing red in the puzzle was an object in the middle of the picture, I'd find the red pieces and put that part of the puzzle together. Proceeding in a systematic way, utilizing all information, I would put the puzzle pieces together. To me, a systematic process to put all the pieces of the business world together is what economics provides.

Simply put, the job of economics instructors is critical in creating first-class business leaders. But then, you already knew that, didn't you?

QuickTake: Tap Into Tom Peters Brain

Tom Peters is blogging now! Your visit to his blog will find you in search of excellence.

The Economics of Student Retention

Student retention is an ongoing issue despite the efforts made by universities to increase retention rates. At a Faculty Senate meeting yesterday one of my fellow Senators proposed that incoming freshmen receive a healthy dose of counseling on financial matters, along with the standard fare of advice on academics.

With that excellent suggestion fresh in my mind, I eagerly took a look at a new report, College Dropouts Who Borrowed for Education Face Long-Term Economic Hardship. Here's part of what I learned:

Known risk factors for dropping out appear to be more important than
borrowing in affecting a student’s chances for degree completion. Among the known risk factors for dropping out are delaying entry into postsecondary education after high school, attending college part-time, and working full-time while enrolled.

The problem with the conclusion as stated in the excerpt is that the risk factors mentioned are not independent of each other. Adverse economic circumstances correlate with all the behaviors that are associated with dropping out. In other words, there be no magic bullet that will solve the problem.

Another aspect of dropping out, not discussed in the report, relates to how effectively student loan programs are administered. Some colleges and universities do a better job than others in getting the money into the hands of students without unnecessary bureaucratic delays. Delays can result in the inability to buy textbooks, for example. That doesn't help retention.

Another relevant factor, in my estimation, is the large tuition increases of recent years. Students who borrow face a mountain of debt after graduation. Since tuition increases have far outstripped the starting salaries of college graduates, the real burden of that mountain has been rising significantly. Not every student likes the thought of climbing that mountain.

As a professional educator and teaching and learning specialist, I recognize the value of good teaching in keeping students around. Universities at least pay lip service to better teaching. Some actually make real efforts to improve it. The financial side of retention needs to be better understood for administrators to allocate resources effectively. The report suggests that private scholarships and other community support can be a significant part of the effort. Unfortunately, it isn't likely that significantly more private scholarship money will be forthcoming. That takes me back to the first paragraph and my colleagues suggestion that financial counseling be an integral part of the first year experience. Knowing how to wisely spend money can be as useful a skill as knowing how to make it.

Learning How to Learn--It's About Time

I love Fast Company magazine's weekly Fast Take Newsletter. The newsletter is all about business. Often, there are links to stories that relate the significance of learning and the ability to learn to business success in today's economy. Learning is "in" in business. I usually find a lot in the discussion that I can take to the classroom and apply.

The linked story about educational reforms taken up by the Rotman School of Management at the University of Toronto has left me hungry to learn more. Here's the revolutionary idea the dynamic Dean of Rotman, Roger Martin, has implemented: a course in the MBA curriculum that will look into "learning how to learn," or developing skills that will enable students to learn faster and more efficiently.

I do this all the time in my freshman Economics 101 courses. Why wait until the MBA level to do it? Wouldn't it be better for students to learn how to learn sooner rather than later? Even before they become freshmen in college?

One of the exercises I ask students to perform that can help them learn how to learn is laid out in my economics text in chapter 1. Here it is, word for word:

Models--From Einstein's Mind to Yours
The renowned physicist Albert Einstein (1879-1955) was in the business of modeling. The most famous model to come from his mind, summarized in the equation e = (mc) squared, provided key insights that led scientists to the ability to split the atom. It is not only economists and physicists that model, however. Psychologists tell us that all of us walk around with models of life in mind.

Take your model of learning. How do you perceive the learning process? A simple model holds that the job of the instructor is to fill your mind with knowledge. In this model you are a passive recipient of facts, figures, and principles. Students whose internal learning model is similar to this one often fail to prosper academically because some important elements of the learning process have been omitted. Remember, Occam's razor tells us to omit only the nonessential elements from models. As Einstein told us, "Everything should be made as simple as possible, but not simpler."

A more sophisticated learning model allows for the student to interact with the instructor, the material, and other students. Key elements of this model involve setting aside time to reflect on the material, to ask questions, and to work with others. Which model is yours?

Freshmen often view the instructor as like a water boy and themselves as an empty glass. I'm there to grab a carafe of water and fill them up with everything they need to know, at least in their minds. If I'm a water boy, then I'm a darn expensive one!

QuickTake: The Teaching Economist

I hate to feature the work of a competing textbook author, but good work deserves kudos. The Teaching Economist is an online newsletter about teaching . . . what else, economics. There are always several good items in every issue. The newletter comes out twice a year, in the spring and fall. Looking for something more often than twice a year? To learn about new ways to make your teaching more current, more effective, and more fun, read this blog (and my other blog, EconOpinion) daily. If you have an RSS Aggregator, you can receive both blogs via syndication.

QuickTake: Teaching Economics Club Style

The learning benefits from creating fractal depth among groups is well recognized. For a group of economics majors, creating fractal depth shouldn't be a problem. An active economics club, one with plenty of faculty involvement, can be a tremendous resource to create and strengthen the bonds between learners. The link searches Google using the term "economics club." Does your school have an economics club? Does the club have a web site?

QuickTake: When Less is More

I'm introducing a new feature to my corner of the blogosphere: the QuickTake. Posts that carry this label will be short and sharply focused. Like this post!