The Handbook for Economics Lecturers

1 Introduction

‘Knowledge is the beginning of practice; doing is the completion of knowing. Men of the present, however, make knowledge and action two different things and go not forth to practice, because they hold that one must first have knowledge before one is able to practise. Each one says, ‘I proceed to investigate and discuss knowledge; I wait until knowledge is perfect and then go forth to practise it.’ Those who to the very end of life fail to practise also fail to understand. This is not a small error, nor one that came in a day. By saying that knowledge and practice are a unit, I am herewith offering a remedy for the disease.’ Wang Yang-ming, Chinese philosopher, 1472–1529

The main aim of economics education is to enable students to ‘think like economists’. According to recent research, thinking like an economist includes not only analytical or problem-solving skills but also creative skills, which ‘help determine how to frame questions, what tools and principles apply to particular problems, what data and information are pertinent to those problems, and how to understand or explain surprising and unexpected results’ (Siegfried et al., 1991, p. 199). A large body of evidence (see, for example, Brown et al., 1989; Boehrer, 1990) shows that an effective way to accomplish this learning is to provide students with increased opportunities to become more actively engaged in the application of economics. However, much of the teaching in many higher education institutions takes the traditional form of lectures and seminars supplemented by problem sets, written assignments and limited class discussions. As recently pointed out by Becker and Watts (2001), the predominant teaching method in economics departments in the United States is still what they refer to as ‘Chalk and Talk’.

As lecturers, we would generally agree that the most vivid and powerful lessons from our own educational experiences are related to projects in which we were actively involved. Concepts, ideas and experiences are harnessed and clarified in our mind more easily and quickly through direct experience than through the reading of books and abstract theories and concepts. This is particularly true in the early development of cognitive skills.

The use of the case method in the teaching of economics has received greater attention in recent years. Velenchik (1995) discusses her experience in using the method to teach international trade policy. She provides an evaluation of the method by comparing the results of students exposed to case discussion with the results of students on the same course but who have instead been taught in more traditional ways. She observed that the students on the case course had a more complete grasp of theory and did better in examination questions requiring analysis of real-world situations using theory. She also observed a dramatic improvement in students’ analytical thinking and in their ability to express themselves verbally.

Carlson and Schodt (1995) discuss their experience of using the case method in teaching development economics and international monetary economics. They present a detailed account of students’ evaluation of the case method and they are able to show that students are emphatically positive and convinced that the use of cases helped them to learn economics. According to their findings, students feel that the use of cases adds interest to the study of economics and makes their classroom much more real. Carlson (1999) explains how students on his statistics course are presented with a situation that requires statistical and economic analysis to solve a realistic problem. Cases with data for real applications are supplied to students who are then required to prepare a written report to a policy decision-maker. The author’s evaluation of the case method shows that the students’ involvement in problem solving has greatly improved their learning of statistical methods.

Traditional lectures and seminars are still valuable for transmitting information and knowledge. However, to help our students learn to ‘think like economists’ we need to consider seriously ways of moving beyond this more traditional mode of instruction. Some of the innovative and more active suggested forms of teaching and learning include the use of classroom games simulations, the introduction of experimental economics, the use of popular and business press, the use of case studies and co-operative learning. In this chapter we will focus on how case studies can be used in economics teaching. The remainder of this introduction explains the basic philosophy of the case method of teaching, its pedagogical value and the different approaches to the use of case studies.