Journal of Economic Literature 2015, 53(2), 285–325

http://dx.doi.org/10.1257/jel.53.2.285

Research on Teaching Economics

to Undergraduates†
Sam Allgood, William B. Walstad, and John J. Siegfried*

This survey summarizes the main research findings about teaching economics to
undergraduates. After briefly reviewing the history of research on undergraduate
economic education, it discusses the status of the economics major—numbers and
trends, goals, coursework, outcomes, and the principles courses. Some economic theory
is used to explain the likely effects of pedagogical decisions of faculty and the learning
choices that students make. Major results from empirical research are reviewed from the
professor perspective on such topics as teaching methods, online technology, class size,
and textbooks. Studies of student learning are discussed in relation to study time, grades,
attendance, math aptitude, and cheating. The last section discusses changes in the
composition of faculty who teach undergraduate economics and effects from changes in
instructional technology and then presents findings from the research about measuring
teaching effectiveness and the value of teacher training. ( JEL A22, I23, J44)

1.  Introduction more insight about the teaching and learn-

ing of undergraduate economics than they

T his article describes research on the eco-

nomics curriculum at American colleges
and universities and on undergraduate eco-
nomics instruction. Our goal is to synthesize
findings from a range of studies and present
them in a way that gives academic economists
* Allgood: Professor of Economics, University of
Nebraska–Lincoln. Walstad: Professor of Economics,
University of Nebraska–Lincoln. Siegfried: Visiting
Research Fellow, University of Adelaide, South Australia,
Secretary-Treasurer Emeritus of the American Economic
Association, and Professor of Economics Emeritus at
Vanderbilt University. The Spencer Foundation and the
Calvin K. Kazanjian Foundation helped support our work
on this review. We also thank the JEL editor and the four
anonymous referees for their valuable comments.
†
Go to http://dx.doi.org/10.1257/jel.53.2.285 to visit the
article page and view author disclosure statement(s).
would otherwise have, based on classroom
experiences or from anecdotes. This review
should help economists better understand
what teaching methods and student behavior
affect economics learning. It also should be
of value to department chairs or faculty com-
mittees who are responsible for decisions
about how economics is taught, and who may
use the research to more effectively organize
instruction and courses for students.
For this review, we describe findings spe-
cific to economic education, but discuss them
in the larger context of changes in higher
education and how economics compares
with other related academic disciplines. As
would be expected, the review builds on past
surveys of research on economic education

285
286 Journal of Economic Literature, Vol. LIII (June 2015)
and, although it covers similar topics, it only
considers research studies published since
the last survey on this subject in the Journal
of Economic Literature (Becker 1997). Our
approach highlights the main points we think
are of most value in the literature. Although
we omit the details from many studies to ease
the reading burden, and because in an elec-
tronic age research papers can be accessed
easily, we do discuss some key studies in more
depth to indicate the quality of the analysis.
In addition, to avoid turning the survey into
an econometric critique, we do not evaluate
the methodology of articles unless it is essen-
tial for understanding the content. Instead,
we target the major questions to explain what
has been learned, either tentatively because
the number of studies is sparse, or more con-
vincingly because the research on a topic is
extensive. Most importantly, we seek to pres-
ent findings that should stimulate thinking
about future research. To encourage it, we
offer suggestions as they arise in the survey.
We limit our survey to research on the
teaching of undergraduate economics and
do not extend it to college teaching in gen-
eral because we contend that economics has
a unique place in the undergraduate curricu-
lum. Economics departments can be located
in different colleges (liberal arts, business)
within an institution, which is not true of most
other disciplines. Economists who teach can
be spread across a campus in interdisciplin-
ary units (e.g., policy or research institutes).
Teaching undergraduate economics differs
from instruction in other subjects because
it draws on content and techniques from
many disciplines, such as mathematics, sta-
tistics, philosophy, psychology, and history,
but blends them in special ways. Economic
analysis also requires extensive verbal and
quantitative reasoning that can be both prac-
tical and abstract. Although teaching eco-
nomics is certainly not completely different
from teaching other disciplines, it does have
some unique qualities that can make it more
challenging than other disciplines and that
justify a focused survey on economic edu-
cation. The findings we report should have
more credibility for economists because they
are based mostly on studies using students
taking economics courses or economics fac-
ulty teaching economics courses.
The article is divided into eight sections
that include this short introduction and a
conclusion. In the second section, we briefly
review the history of research on teaching
college economics to acquaint instructors
with the major developments and sources of
information on the subject since its origins
in the 1960s. In the third section, we survey
the landscape of undergraduate economics
to describe enrollments, the typical curricu-
lum of courses for undergraduate economics
students, and outcomes from the economics
major. In the fourth section, we use eco-
nomic theory to explain the likely effects
of decisions that economics professors can
make either in structuring or teaching their
courses, and also students’ decisions about
enrolling and participating in economics
courses. The purpose of this theory section
is to increase the understanding of empiri-
cal findings about faculty teaching decisions
and selected student behaviors and decisions
that are the subjects of the fifth and sixth sec-
tions. The seventh section briefly discusses
how changes in the characteristics of faculty
and changes in technology are likely to affect
undergraduate economics instruction in the
future, before turning to the issue of teach-
ing effectiveness and examining research on
the assessment of instruction from student
and faculty perspectives.
2.  A Brief Research History
We date the first review and general rec-
ognition that the teaching of economics is a
topic for serious scholarship by economists
to Rendigs Fels (1969), who advocated for
research that used quantitative methods
 Allgood et al.: Research on Teaching Economics to Undergraduates
and, at times, economic theory, to address
questions about the teaching and learning
of economics. He thought this research was
superior to the ad hoc thinking and casual
empiricism that many economists used when
they discussed teaching with colleagues,
even though they demanded more rigorous
scholarship in other areas of economics.
By the end of the 1970s, the quantity of
research on economic education was suf-
ficient for a survey article to be published
in the Journal of Economic Literature
(Siegfried and Fels 1979). Two signifi-
cant developments made that survey pos-
sible. First, the Committee on Economic
Education of the American Economic
Association began organizing annual sessions
at the AEA meetings and, since the 1960s,
many of those sessions had been devoted to
presenting research findings that were pub-
lished in the Papers and Proceedings issue of
the American Economic Review. Then, the
1969 founding of the Journal of Economic
Education gave economists another outlet
in the form of a specialty journal in which
to publish research. Second, in 1968, the
Test of Understanding of College Economics
(TUCE) was prepared by a distinguished
committee of economists that included
George Stigler, Paul Samuelson, and G. L.
Bach. Now in its fourth edition (Walstad and
Rebeck 2008), this test gave researchers a
standardized measure that could be used to
assess student achievement in principles of
economics across classrooms and campuses.
In the 1980s and 1990s, a broader research
agenda that emphasized better data analysis
and sounder econometric methods improved
the body of research sufficiently to warrant
another JEL review (Becker 1997). While
the two publication outlets noted above
remained the primary sources for research
on the teaching of economics, they were
augmented with research articles in g­ eneral
interest economics journals and books.
Criticisms that the TUCE did not fully assess
287
what students were learning nor behavioral
effects sparked a search for alternative out-
come measures. These changes, and others
that expanded the research questions asked
and increased the rigor of the analysis, sig-
nificantly contributed to this third JEL sur-
vey article on the teaching of economics at
the undergraduate level.
3.  The Economics Major
The teaching of undergraduate economics
at most colleges and universities is organized
around the economics major. Here we pres-
ent data on the number of economics majors,
describe its goals and objectives, identify the
required coursework, discuss the short- and
long-term learning outcomes from the major,
and highlight the importance of principles
instruction to departments.
3.1 Numbers and Trends
National data show that 27,995 undergrad-
uate students graduated with a bachelor’s
degree in economics in the 2011–12 aca-
demic year, the latest year for which compre-
hensive data were available (National Center
for Education Statistics [NCES] 2013, Table
325.92). To put this number in perspec-
tive, it is fewer than majors in other social
sciences, such as political science (39,800),
history (35,121), and sociology (30,132), but
substantially greater than majors in tradi-
tional scientific or quantitative disciplines
such as physics (5,531), chemistry (13,472),
or mathematics and statistics (18,842). At
the same time, economics majors are only
26 percent of the number of psychology
majors (108,986) and a miniscule 8 percent
of business majors (366,815). Interest in dif-
ferent majors, of course varies from campus
to campus depending on whether a college
or university offers an undergraduate busi-
ness degree or how different undergradu-
ate majors are structured at an institution.
The general point is that the number of
288 Journal of Economic Literature, Vol. LIII (June 2015)
e­ conomics majors is sizable on most cam-
puses, at least relative to the number of
majors in other social sciences, core physical
sciences, and mathematics, and accordingly
has a solid place in the curricula of the 800 or
so American colleges and universities where
it is offered.1
A problem with the NCES data is that
only one major is counted per student, which
means that economics majors are under-
counted if students also major in another
subject that is reported first to the NCES.
At least one comprehensive survey indi-
cates that the number of economics majors
who also major in another subject is sub-
stantial. Of a sample of economics majors
who graduated between 2000 and 2010, 37
percent had a second major in another dis-
cipline (National Center for Science and
Engineering Statistics [NCSES] 2010).
Although we do not know whether eco-
nomics is a more attractive double major
than other subjects, we suspect that it may
be popular because of the broad content it
covers, compared with physical sciences
­ cally involves using deductive reasoning in
such as physics or chemistry, or because of its
content overlap with business. What we do
know is that for students who do not pursue a
­postgraduate degree, the ­double-major strat-
egy generally increases subsequent earnings
by about 2 percent (Del Rossi and Hersch
2008), and is even more valuable if the two
majors are in different divisions of a college
such as the humanities, social sciences, and
natural sciences. As is true for single majors,
incremental returns to a second major are
greater when it is in a more quantitative or
technical field.
1 Petkus, Perry, and Johnson (2014) reported that,
as of 2010, a population total of 1,428 four-year colleges
and universities in the United States taught undergradu-
ate economics, but only 792 offered an economics major.
Within the 55 percent of institutions offering an economics
major, there were 1,601 versions of it (e.g., mathematical
economics, business economics), suggesting that there are
two versions of it, on average, at each institution.
The number of undergraduate economics
degrees awarded annually by U.S. colleges
and universities is subject to cyclical swings,
as shown in Figure 1. Economics degrees
declined during the early 1970s and then
reversed course and rose steadily through
1990. From 1991 through 1997, the num-
ber of economics degrees awarded fell pre-
cipitously, declining by about 30 percent.
Starting in 1998, there was a recovery that
reached a plateau in 2004 and held steady for
three years. In 2007, the number of degrees
awarded annually resumed an upward tra-
jectory, rising by almost 20 percent from
2007 to 2011, before falling slightly in 2012.2
3.2 Goals and Objectives of the Major
There is broad consensus among eco-
nomics faculty that enabling students to
understand how and when it is appropriate
to “think like an economist” is the overarch-
ing goal of undergraduate economic educa-
tion (Siegfried et al. 1991; Siegfried 1998).3
This approach to economic education typi-
conjunction with parsimonious models to
help understand economic phenomena. It
also involves identifying trade-offs in the
context of constraints, recognizing implicit
opportunity costs, distinguishing positive
from normative analysis, recognizing incen-
tives, tracing the behavioral implications
of changes, exploring the consequences of
aggregation, and searching for unintended
consequences.
Both the structure of the economics dis-
cipline and the undergraduate major have
2 For further discussion of the role of time trends and
business cycles in affecting the number of economics
degrees awarded using various data sources, see Siegfried
and Round (2001) and Siegfried (2014).
3 There is ongoing debate about the appropriate empha-
sis on technical education and the role of liberal arts.
Colander and McGoldrick (2009) qualify the goal from a
liberal arts perspective and argue that it should be about
“thinking like a liberally educated person who knows
economics.”
 Allgood et al.: Research on Teaching Economics to Undergraduates
US undergraduate economics degrees 1971–2012
30,000
25,000
20,000
15,000
10,000
5,000
0
1970–71 1980–81
Figure 1. U.S. Undergraduate Economics Degrees 1971–2012
Source: NCES 2013, Table 325.92.
been likened to a tree. The major is rooted
in the introductory course or courses. A core
of principles, analytical methods, and quan-
titative skills comprise the trunk of the tree.
Its branches, protruding extensively in all
directions, represent subdisciplinary fields,
ranging from labor economics to monetary
economics. The subfields generate the prob-
lems to which the principles and quantita-
tive approaches can be productively applied.
These two characteristics—a core of theo-
retical and empirical knowledge, combined
with opportunities to extend that knowledge
to a wide variety of topics—distinguish eco-
nomics from other social sciences. Whereas
economics is much like a tree, other social
sciences seem more akin to a hedge, with
separate and largely independently rooted
subfields, each with their own content and
methodology.
289
1990–91 2000–01 2010–11
Some departments design their major
around expected proficiencies that should
be demonstrated by an individual holding
a bachelor’s degree in economics. The most
commonly cited proficiencies have been
articulated by Hansen (2001). They include
the ability to: (1) access existing econom-
ics knowledge; (2) display understanding
of economic knowledge; (3) interpret and
evaluate economic knowledge; (4) interpret
and manipulate economic data; (5) apply
economic knowledge to an analysis of an
economic problem; and, (6) create new eco-
nomic knowledge. From a recent survey
of 202 departments of economics, Myers,
Nelson, and Stratton (2011) found that over
half of the programs agreed with the first
five Hansen proficiencies. Only the ability to
create new economic knowledge was miss-
ing from their list of the ten most i­mportant
290 Journal of Economic Literature, Vol. LIII (June 2015)
s­tudent learning outcomes, probably
because it is a stretch for most undergrad-
uates. Also among the top ten, and, in fact,
ranked first, was the ability to use critical
thinking skills. Ranked third overall were
writing skills. Perhaps surprisingly, oral
communication skill was not ranked among
the ten most important learning outcomes,
and, indeed, did not even garner majority
support.
3.3 Economics Coursework for the Major
A sample of 346 colleges and universities
that responded to the 2012 annual Universal
Academic Questionnaire (UAQ) survey by
the American Economic Association (Scott
and Siegfried 2013; Siegfried and Walstad
2014) provided information about under-
graduate economics programs. The sample
is representative of undergraduate econom-
ics degrees institutions and accounts for 70
percent of U.S. undergraduates who gradu-
ated with a bachelor’s degree in economics
in 2012. The results show that the adminis-
trative location of an economics department
varies. Some 64 percent of departments are
located in colleges of arts and sciences, 15
percent are housed in colleges of business
only, and 21 percent are part of both types of
colleges and offer degrees in both colleges.
Economics is seldom housed in a business
college at selective private liberal arts col-
leges (11 percent) or private PhD-granting
universities (10 percent) because few have
an undergraduate business college. At public
institutions, most of which have a business
college, economics is located there about
half the time (40 percent for PhD, 54 per-
cent for masters, and 55 percent for bache-
lor’s institutions).
Coursework for U.S. economics majors
is similar everywhere and not heavily influ-
enced by departmental administrative
location. This uniformity is surprising for a
discipline that focuses on choices among
alternatives and that explicitly studies product
­ ifferentiation.4 The typical major require-
d
ments consist of ten courses. Students begin
their economics major by taking two princi-
ples courses (or one course if principles is
taught in one semester). Virtually all majors
then take both intermediate micro and
macro and an introductory statistics course.
An introductory statistics course offered by
the economics department is required by
about three-fourths of the programs, while
a statistics course taught by a department
outside economics is required by about one-
fourth. The five universally required courses
are followed by five electives to complete the
major.
No single elective is required at more than
half of the institutions, although economet-
rics is now required at 50 percent of pro-
grams in colleges of arts and sciences and
45 percent of those in business colleges.5
Money and banking is required in 27 per-
cent of the programs at business schools,
but in only 10 percent of those at colleges of
arts and sciences. No other specific course
is required at more than 11 percent of pro-
grams. Economic history is almost defunct
as a required course. History of economic
thought has been more resilient (about
10 percent require it). The trend over the
past three decades is clear: add economet-
rics and drop other specific requirements,
leaving room for four electives (Siegfried
and Wilkinson 1982; Siegfried and Walstad
2014).
Programs differ most among institution
types in their graduation requirements for
seniors seeking an economics degree. The
most common requirement beyond general
coursework is for students to complete a
4 Coursework requirements also have not changed
much since the 1980s (see Siegfried and Wilkinson 1982).
5 Johnson, Perry, and Petkus (2012) reported that over
75 percent of the top-twenty-five-ranked economics PhD-
granting universities and 80 percent of the top-ten-ranked
liberal arts colleges require econometrics in their under-
graduate major.
 Allgood et al.: Research on Teaching Economics to Undergraduates
seminar or capstone course (48 percent), but
the requirement is found more frequently at
selective private liberal arts colleges (66 per-
cent) and less frequently at PhD-granting
public universities (25 percent) where large
enrollments overwhelm any desires to tai-
lor major requirements in ways that require
low student-to-faculty ratios. A senior thesis
is second most popular among graduation
requirements, but is mandatory at only 18
percent of programs. It varies in use from 33
percent at private liberal arts colleges that
do not offer a PhD in economics to about
10 percent at other types of institutions. The
third requirement in order of importance is
a comprehensive exam, but it is used by only
9 percent of programs. Here again, as with
the senior thesis, selective liberal colleges
are most likely (14 percent) and public uni-
versities are least likely (3 to 4 percent) to
require it.
What the graduation requirements indi-
cate is that the type of institution and adminis-
trative location of the economics department
affect the character of students’ educational
experience. Using an index of ten dimensions
of the major, Dean and Dolan (2001) found
that among departments in a homogeneous
sample of bachelor’s degree-granting insti-
tutions, economics departments located in a
liberal arts college, regardless of whether the
institution contains a business college, offer
a “richer” educational experience to majors
than do departments located in business col-
leges. In their empirical estimates, the effect
was about a 40 percent increase in an index
of “richness” they developed. Some dimen-
sions of the educational experience index
included low enrollment gateway freshman
seminars in economics, depth as reflected in
the extent to which electives require inter-
mediate micro or macro as a prerequisite,
breadth in terms of varied applied course
offerings, senior experiences such as a cap-
stone seminar or an honors program, and
the option to prepare for graduate work in
291
e­ conomics either via mathematical econom-
ics or advanced econometrics courses or a
graduate school preparation career path.
3.4 Factors Affecting the Number of Majors
We do not have a clear understanding of
what determines why an undergraduate stu-
dent chooses to major in economics despite
research on the topic (Siegfried and Round
2001; Siegfried 2012). That uncertain out-
come, however, should not be surprising
because there simply are many factors that
can affect the majoring decision, whether
it be in economics or another discipline.
Studies have suggested that the changes
in the number of economics majors reflect
demographic trends in higher education or
job prospects for economics majors (Skoorka
and Condon 2002), that economics majors
are discouraged business majors (Mumford
and Ohland 2011) and fluctuate on the basis
of changing interest in business education,
or that economics majors have declined
in response to poor teaching (Lombardi,
Ramrattan, and Szenberg 2004).
There also is the hypothesis perhaps most
obvious to economists, namely that price
matters for allocation decisions. As colleges
and universities progressively implement
differential tuition rates based on major
(engineering, business, and nursing often
command a premium), evidence is emerging
to confirm that students react to the relative
price of majors in ways similar to their reac-
tions to the prices of beer, cars, and hamburg-
ers (Stange 2013). Grades also can be viewed
as a price for obtaining a degree, and consis-
tently higher grading standards in economics
and STEM fields, relative to other under-
graduate majors, may deter students from
pursuing economics and STEM degrees
(Rask 2010; Ost 2010; Butcher, McEwan,
and Weerapana 2014). Each hypothesis is
probably credible to some degree, and taken
together, they reveal the challenge of finding
a consensus answer.
292 Journal of Economic Literature, Vol. LIII (June 2015)
What too is a puzzle is the gender differ-
ence in the number of economics majors.
The percentage of undergraduate econom-
ics degrees awarded to women peaked at
35 percent in 2003 and has since hovered
between 30 and 33 percent (Siegfried 2014).
Although the share of female college and
university students has surged over recent
decades, rising from 39 percent in 1960 to
current levels around 57 percent (Goldin,
Katz, and Kuziemko 2006), the fraction of
females earning undergraduate degrees in
economics has been stagnant, which has
constrained the growth of undergraduate
economics degrees.
A number of studies have investigated
reasons for this gender gap, but no expla-
nation solves the mystery. Not surprisingly,
research confirms that the variation in the
female proportion of economics majors
closely tracks the overall female proportion
of student enrollments at various institutions
(Emerson, McGoldrick, and Siegfried 2014).
Women are less likely than men to enroll in
introductory economics courses, suggesting
that the gender gap in economics starts early
and that the gateway courses can affect the
number of women majors (Dynan and Rouse
1997; Emerson, McGoldrick, and Mumford
2012).
Several studies over time and from many
institutions find no difference in the effect
of female instructors on the proportion of
women who major in economics (Dynan and
Rouse 1997; Robb and Robb 1999; Fournier
and Sass 2000; Rask and Bailey 2002; Jensen
and Owen 2001, Bettinger and Long 2005;
and Emerson, McGoldrick, and Siegfried
2014). Other factors such as mathematics
aptitude and quantitative course experience
have been studied, but once the analyses
were conditioned on students enrolled in
economics, none of the factors were found
to be all that important (Dynan and Rouse
1997; Chizmar 2000). Difference in the sen-
sitivity of males and females to grades in
economics as an influence on pursuing addi-
tional study in economics has been examined
too, with conflicting results and questions
about causality (Rask and Tiefenthaler 2008;
Owen 2010; Goldin 2013; Main and Ost
2014). Institutional effects add to the puzzle.
Using a large data set from public universi-
ties, Emerson, McGoldrick, and Mumford
(2012) found a persistent gender gap at all
levels of instruction (principles, intermedi-
ate, and the major) even after controlling
for aptitude, course performance, and many
student characteristics. They concluded that:
“Gender differences in factors that influence
the decision to persist in economics … raise
questions as to the extent to which such influ-
ences can be generalized across institutions”
(361). At this point, it seems easier to say
what does not affect the proportion of eco-
nomics majors that is female—faculty role
models, mathematics aptitude, differences
in mathematics training—than to identify
what does, beyond the obvious proportion of
the overall student body that is female.
3.5 Outcomes from the Major
Research indicates that undergraduate
economics majors are satisfied with their
experience and think that it will be valuable
for their careers. A 2010 survey of 1,072 eco-
nomics majors at both public and private
colleges and universities reported that 78
percent of majors were either satisfied (47
percent) or highly satisfied (31 percent) with
economics as a major, and only 3 percent
were dissatisfied (Jones et al. 2009). One
likely reason for the high degree of satisfac-
tion is that most majors felt that the skills and
knowledge they learned in their major are
relevant to their prospective careers (87 per-
cent agreed). Also, when asked to cite what
they learned from the major, the economic
way of thinking came out on top (89 percent
agreed), which is consistent with a primary
goal economists articulate for the economics
major (section 3.2).
 Allgood et al.: Research on Teaching Economics to Undergraduates
What undergraduates who earn a bache-
lor’s degree in economics do after they grad-
uate is a mixture of pursuits. Although some
economics baccalaureates seek either an
MBA or a law degree, about 3 percent enroll
in terminal masters programs in economics
and about 1.5 percent or so matriculate into
an economics PhD program.6 The small per-
centage of American economics majors who
continue their economics studies in graduate
school is a concern because it influences the
future of the economics profession. More
undergraduates who major in econom-
ics might be induced to consider graduate
work in economics if faculty undertook sys-
tematically to involve them in real research
(Ehrenberg 2005). If this practice were
more common, more undergraduates would
experience the thrill of answering a research
question, see the enjoyment faculty get from
conducting research, and observe what the
life of an academic economist is like. The
economics majors who enter the labor force
directly after graduation go into a variety
of occupations and industries. A survey of
graduates with only a bachelor’s degree in
economics from 2000 to 2011 with varying
levels of work experience found 22 percent
in accounting, auditing, or bookkeeping, 14
percent in management, 11 percent in sales
6 About 1,000 economics PhD degrees are awarded by
U.S. universities annually (NCES 2013, Table 325.92).
Two-thirds of those who begin a PhD program even-
tually earn their degree (Stock, Siegfried, and Finegan
2011), so about 1,500 new PhD students enter annually.
Roughly one-third of new PhD students are U.S. citizens
or permanent residents, who mostly attend U.S. colleges
or universities. A few international PhD students also earn
their bachelor’s degree in the United States. Thus, about
500 graduates of U.S. colleges and universities enter U.S.
economics PhD programs annually. About 1,500 students
enter masters programs each year. There is no tabulation of
the fraction of the masters students that is domestic, but we
suspect it is much higher than for PhD programs. If it is
two-thirds (double the PhD proportion), an additional 1,000
domestic bachelor’s graduates begin post-graduate study
in economics annually, increasing the overall fraction who
study economics in graduate school to almost 5 percent of
the annual domestic crop of economics bachelor’s degrees.
293
and marketing, and 11 percent in insurance,
securities, real estate, and business services
(NCSES 2010).
Research shows that majoring in eco-
nomics affects earnings. Black, Sanders,
and Taylor (2003) reported that economics
majors earn almost 20 percent more than
other majors in social sciences and about 10
percent more than business majors. Allgood
et al. (2011) found that economics majors
compared with other majors were 14 per-
cent more likely to earn over $100,000 a year,
but they were also more likely to work more
than 50 hours a week. Carnevale and Cheah
(2015) used a 2011–12 U.S. Census sample
and report that experienced workers 30 to
54 years of age who held only a social-sci-
ence bachelor’s degree in economics earned
a median salary of $83,000, which ranked
highest among all social science majors
(averaging $67,000) and was thirteenth high-
est among all majors. Similarly experienced
workers with an undergraduate business
economics degree earned a median salary
of $85,000, and it was the highest among
12 business majors (finance was next at
$83,000). Carroll, Assane, and Busker (2014)
also used a 2009–10 U.S. Census sample and
reported that about two-thirds of the earn-
ings premium for economics majors is from
the type of job they perform and about one-
third comes from what they earn over other
employees in the same job. Lawyers who
majored in economics as undergraduates
tend to earn more than attorneys with other
undergraduate majors (Craft and Baker
2003).
Majoring in economics or studying eco-
nomics at the undergraduate level affects
behaviors and outcomes beyond just earn-
ings and work. Bauman and Rose (2011) con-
firm the findings of Frey and Meier (2003)
that economics majors are not as generous as
other majors. The reasons appear to be due
to selection rather than indoctrination from
economics instruction. Allgood et al. (2011)
294 Journal of Economic Literature, Vol. LIII (June 2015)
show that college graduates with coursework
in economics or who major in economics are
more willing to assume risk by investing in
stocks, and at the same time are more pru-
dent in managing their use of credit cards.
This outcome suggests that the study of
economics contributes to financial literacy,
which can be an important advantage over a
lifetime, given the low level of financial liter-
acy among most adults (Lusardi and Mitchell
2014).
3.6 Principles Courses and the Major
Beyond offering a set of courses for
the economics major, the most significant
instructional contribution that economics
departments make to undergraduate educa-
tion is to offer principles courses. They serve
several purposes. For economics depart-
ments, they are the gateway to the major
because they are the first economics courses
students take beyond any high school eco-
nomics instruction. The principles courses
are a recruiting ground for majors. About
one-third of economics majors decide to
do so while taking a principles course and
about two-thirds declare their major some-
time after completing a principles course
(Mumford and Ohland 2011). Over half (52
percent) of a sample of economics majors
reported selecting economics because “I did
well in early courses and found it interesting”
(Jones et al. 2009). Principles courses serve
broad interests within a college or univer-
sity. Other departments and programs such
as business administration, political science,
environmental studies, and international
relations see value in economic education
and thus require their students to take one
or two courses in economics as part of their
requirements. This outside demand for eco-
nomics instruction rather than coursework
for an economics major, often justifies the
resources allocated to economics within
an institution. With over a million students
enrolled annually in introductory economics,
and fewer than 30,000 graduating e­ conomics
majors per year, it is evident that only a
small fraction of principles students even-
tually become economics majors. About 42
percent of all the students who matriculate
at a college or university that offers a major
in economics take at least one economics
course (principles).7 Relatively more stu-
dents take at least one economics course at
private economics PhD-granting universities
(62 percent) and selective private liberal arts
colleges (46 percent) than at either public or
other private institutions where a bachelor’s
is the highest degree offered (38 percent).
The proportion of students taking econom-
ics at public masters and PhD institutions is
between these extremes.
Principles courses are offered in different
combinations across institutions. In the 2012
UAQ survey, 84 percent offered a two-term
principles of economics sequence and 37
percent taught a one-term combined micro
and macro principles course, implying that
21 percent of the institutions provided both
options—a single principles course and
a two-semester sequence (Siegfried and
Walstad 2014). The single-term course is
most common as the only option at private
selective liberal arts colleges, where 43 per-
cent of the colleges report that they do not
offer a two-semester alternative. Less than
17 percent of other institutions rely solely
on a single-semester combined micro and
7 The estimate of 42 percent is from a sample of 43 per-
cent of the approximately 792 colleges and universities that
offer a major in economics. The 792 institutions account
for 64 percent of full-time, first-time, degree-seeking
undergraduates (NCES 2011). We do not have any data
on enrollments in introductory economics at the 636 four-
year institutions that do not offer a major in economics. If
no students at the remaining 36 percent of institutions take
an introductory economics course, the percentage of all
entering students who are exposed to a college economics
course falls to 27 percent, but if everyone does, it rises to
63 percent. Our best guess is a slightly lower percentage
applies to this 36 percent of institutions, so that the overall
proportion of entering college students exposed to a col-
lege economics course is about 40 percent.
 Allgood et al.: Research on Teaching Economics to Undergraduates
macro introductory course. Of the programs
offering a two-semester sequence, 30 per-
cent specify an order for the courses, with 86
percent of them starting with micro.
The value of undergraduates taking just
a principles of economics course or a few
economics courses but not majoring in the
subject, can have lasting effects for students
because it develops their economic intuition.
Studies of college seniors, adults, and cor-
porate employees who took an economics
course during their undergraduate studies
show that everyone who took the course had
significantly greater retention of economic
knowledge compared with similar groups
who did not receive economics instruction
while attending college (Walstad and Allgood
1999; Walstad and Rebeck 2002; Wood and
Doyle 2002). Undergraduates with some
college economics coursework have higher
earnings and are more likely to engage
in such civic behaviors as joining a politi-
cal party and donating to one, but they are
not more likely to volunteer or vote, results
which are similar to those of undergraduate
students who majored in economics (Allgood
et al. 2011; Allgood et al. 2012).
4.  Faculty and Student Decisions:
Some Theory
Research in economic education is largely
empirical and often focuses on the efficacy of
alternative pedagogies, class environments,
and the effects of grading schemes on stu-
dent learning and behavior. Most studies,
however, do not provide a theoretical founda-
tion for why a change in a teaching practice
or grading system affects student learning or
another outcome or how a student is likely
to respond to a change. Here we outline a
model of professorial and student choice that
incorporates the sequential nature of the
interaction between professor and student.
A professor first decides on the course struc-
ture, such as the grading scheme, and then
295
the student chooses the amount of effort to
apply to the course given the decisions made
by the instructor.8 The model provides a the-
oretical context for understanding empirical
findings that are sometimes inconclusive
or contradictory. The model of professorial
behavior is based on work by Becker (1975),
while the model of student behavior is sim-
ilar to one in Krohn and O’Connor (2005).
4.1 Professorial Choice
Why do economics professors care how
students perform in their classes? Professors
may care about grades, student effort, and
student learning because of a preference
for student well-being. Professors also may
care about these factors because of their
impact on course evaluations (Love and
Kotchen 2010; Kanagaretnam, Mathieu, and
Thevaranjan 2003) or they may wish not to
be pestered by students (Franz 2010). We
are agnostic in this model about why profes-
sors have preferences for particular student
outcomes. We simply assume that professor
utility is a function of teaching output, i.e.,
measure of student grades, ​T(​ G​) . ​ G​​ is com-
student learning, which is a function ~ ~
of some
puted from the student’s choice of grade and
is a function of the professor’s chosen param-
eters of time spent on teaching, pedagogy,
and grading ​(t, δ, γ)​.
Utility
~
for an economics professor is
​u(T(​ G​) , R(r), C)​, where ​R(r)​is research out-
put and ​C​is consumption. Utility is increas-
ing in each argument. A professor’s research
is a function of time spent on research r​​
and consumption reflects income obtained
from teaching and research and the value
of leisure to the professor. This structure
is general enough to encompass professors
who place an intrinsic value on teaching.
8 Love and Kotchen (2010) also model the professor
as explicitly accounting for student choice. Franz (2010)
develops a model where student and professor engage in a
four-stage sequential game.
296 Journal of Economic Literature, Vol. LIII (June 2015)
Similarly, research productivity can generate
utility because researchers think their work
is a contribution to their field. Given the
constraints, the professor maximizes utility,
and choices made by the professor incorpo-
rate the expected response of students to the
faculty choices ~
through the students’ choices
of grades (​​ G​​) . The benefits of changes in
​t​, ​δ​, and γ
​ ​are the higher utility resulting
from greater teaching output and higher
consumption from more income, assum-
ing income is positively related to teaching
output. Different choices of pedagogy and
grading schemes require different amounts
of professor time, and more time spent on
teaching has the cost of less time for research
and leisure.
One implication from the model is that
faculty may adopt new pedagogy even if
learning output is unaffected, or even if
learning decreases. A professor reallocates
time obtained from a cost-saving pedagogi-
cal change (e.g., online instruction or auto-
graded homework) to research or leisure.
In a setting where compensation is heav-
ily weighted towards research, faculty will
tend to choose a combination of (​γ, δ​) that
minimizes time spent teaching. Brickley
and Zimmerman (2001) show that when a
research institution increased the weight
given to teaching relative to research for
making promotion and salary decisions, then
teaching evaluations increased and the num-
ber of working papers decreased.
This basic model, of course, abstracts from
a number of important elements of profes-
sorial decision making and context. First,
the model only assumes variable costs, but
in reality there are fixed “start-up” costs to
adopt a new pedagogy because the professor
would have to learn about the pedagogy and
learn how best to use it. It is possible that
these fixed costs create a substantial barrier
to adoption, although there is no empiri-
cal evidence to support this view. Second,
professors adopting a new pedagogy do not
know with certainty whether it will improve
student learning. This uncertainty can slow
adoption of a new pedagogy, especially for
faculty who are risk averse in their teaching.
Third, the teaching quality of instructors is
measured with error, which means that pro-
fessors who do not believe improved teach-
ing will be valued or rewarded have less
incentive to adopt a new pedagogy. Such ele-
ments, however, can be added to the basic
model if they are important for understand-
ing and interpreting empirical results.
4.2 Student Choice
The student model assumes that the typ-
ical undergraduate receives utility from
grades, learning, and how he or she spends
time. Utility is ​u  =  u(G, K, S, l)​, where G,
K, and S are vectors of grades, knowledge,
and study time, and l is leisure, which in
this case is time spent on other interests. A
student maximizes utility by allocating avail-
able time to study in n classes and leisure,
​​∑ ni=1  ​ ​​ ​Si​  ​​  + l = T​. The student converts study-
ing the subject matter of class ​i​to knowl-
edge via an educational production function,
​​K​ i​​  = ​f​  i(​​​ ​Si​  ​​; ​t​ i​​, ​δ​ i)​​ ​​, where​ ​Si ​  ​​​is the time the stu-
dent spends studying for the class, ​​t​ i​​​ is the
time a professor devotes to teaching, and δ​ ​​ i​​​
is the pedagogy, i.e., technology employed.
Grades are determined based on the level
of knowledge according to a grade function,​​
G​ i​​  = g(​K​ i​​; ​γ​ i​​)​, where ​​γ​  i​​​reflects the profes-
sor’s grading policy.9 This structure incorpo-
rates the fact that students may care about
more than grades; they may care about how
much they learn. It is possible that pref-
erences over grades and knowledge may
9 ​γ​in the educational production function and ​δ​in the
grade function could be treated as vectors to represent the
many different choices instructors make. Furthermore, we
assume that how a student is evaluated does not directly
impact how much they know. That is, ​γ​does not enter the
educational production function. Changes to how a course
is graded will impact knowledge by affecting how much a
student studies.
 Allgood et al.: Research on Teaching Economics to Undergraduates 297

be course specific. Students in a required
principles course may care only about their
grades, whereas economics majors in a field
course may also care about how much they
learn. The focus on grades, for both faculty
and students, reflects the common use of
grades as an outcome measure.
The student’s maximization problem can
be characterized as a time choice problem by
substituting all but the time constraint into
the utility function. Maximizing utility sub-
ject to the time constraint yields the solution
for study time, ​​Si​  *​  ​(​t​ i​​, ​δi​  ​​, ​γi​  ​​,  T)​. The educational
production function determines knowledge,​​
K​ i*​  ​  = ​f​  i​​​(​Si​  *​  ​; ​t​ i​​, ​δi​  ​​)​​. The level of knowledge
in turn determines the grade, G​  ​​ i*​  ​  = g(​K​ i*​  ​; ​γi​  ​​)​.
If the student takes the professor’s choices of
(​t, δ, γ​) as given, the effects of changes in the
parameters ​δ​and ​γ ​on study time and grades
can be evaluated. Such comparative statics
describe much of the research on student
outcomes and behavior conducted in eco-
nomic education.
This student model has many implications
for decisions made by the professor and
student reactions to them. Consider how a
change in a parameter of the grade function
affects grades and knowledge.
∂ ​K​  *​  ​ ∂ ​S​  *​  ​
(1) ​​ ___i  ​  = ​f​  si​ ​ ​ ___i  ​   and ​ ___i  ​  = ​g​ Ki ​  ​​  f​  si​ ​​  ___i   ​  + ​g​ γ​​  .​
∂ ​γ​  i​​ ∂ ​γ​  i​​
If a professor changes how a class is graded,
this change does not directly change knowl-
edge or learning. Instead, what changes is an
increase or decrease in the amount of study-
ing (effort), which in turn affects knowledge
or grades. The change in grading scheme
affects how a given level of knowledge is
converted to a grade (​​g​ γ​​​). If, for example,
a professor decides to change a course by
now grading homework assignments when
in the past they were assigned but ungraded,
it is not the act of grading homework that
increases student knowledge, but the
increase in study time (if ∂ ​  ​Si​  *​  ​  /  ∂ ​γi​  ​​  >  0​) as
students react to the new graded homework
structure. If, however, homework grades are
higher than exam grades, and homework
grades become a larger part of final grades
relative to exams, then the student can earn
a higher final grade without learning more
or performing better on either homework
assignments or exams (​​g​ γ​​  >  0​).
A change in a parameter of the education
production function is similarly analyzed and
yields other insights about the use of study
time. Equation (2) shows that a change in
pedagogy can influence how much students
study and how much students learn, holding
everything else constant (  ​​f ​  iδ ​​ )​:
∂ ​K​  *​  ​ ∂ ​S​  *​  ​ ∂ ​G​  *​  ​ ∂ ​K​  *​  ​
(2) ​​ ___i  ​  = ​f​  si​ ​ ​ ___i  ​  + ​f​  δi ​ ​  and ​ ___i ​  = ​g​ Ki ​ ​ ​  ___i  ​  
∂ ​δ​  i​​ ∂ ​δ​  i​​ ∂ ​δ​  i​​ ∂ ​δ​  i​​
= ​g​ Ki ​​​ (​f​  si​ ​ ​ ___i  ​  + ​f ​  iδ ​​ )​​.
∂ ​S​  *​  ​
∂ ​δ​  i​​
Even if ​​f    ​  δi ​ ​  >  0​ and ​​f​  Si ​ ​  >  0​, the effect of a
change in pedagogy is ambiguous because
students may choose to study more or less
on the course that introduces an improved
pedagogy.
The basic model of student choice has
extensions with the grade function that may
explain why some pedagogical innovations do
∂ ​G​  *​  ​ ∂ ​S​  *​  ​ not yield better student outcomes. Students
∂ ​γ​  i​​ ∂ ​γ​  i​​ may target earning a particular grade in a
course (say B or C) rather than trying to earn
the highest grade possible. Allgood (2001)
shows that if a student has a specific grade
target in a course with a pedagogical inno-
vation (​∂ ​Gi​  ​​  /∂ ​δi​  ​​  = 0​ ), then ∂ ​ ​Si​  ​​  /∂ ​δi​  ​​  <  0​.
The grade reward for students also may be
nonlinear and the grade incentives during
a course can change as students react to
instructor feedback, two issues highlighted
in the work of Oettinger (2002). He hypoth-
esizes that letter grades create a nonlinear
relationship between studying and grades.
In this case the incentive to study is greatest
for students near a grade cut-off, but differ-
ent for students not close to the next highest
298 Journal of Economic Literature, Vol. LIII (June 2015)

grade because ∂ ​  ​Gi​  ​​  / ∂ ​K​ i​​  →  0​.10 If students While it may seem logical that if students
behave strategically, his model predicts that attend class more they should earn higher
students should be clustered just above fixed grades, (​∂ ​Gi​  ​​  / ∂ ​Ai​  ​​  >  0​), it is not necessarily
grade cut-offs. Using a sample of 1,200 prin- the case. Students may substitute out-of-class
ciples of economics students, he found that study time for class attendance, which might
grades were clustered just above cut-offs, change the sign of ​∂ ​K​ i​​  / ∂ ​Ai​  ​​​. Alternatively,
especially A’s and D’s. Oettinger also modi- attendance time for class i may be taken
fies his model to allow students to adjust their from some other class j. In addition, if grades
behavior in response to the grades they have are partially made a function of attendance,
received. With this change, his model pre- this is equivalent to a grade for input rather
dicts that an increase in grade performance than output. The attendance portion of the
before the final exam will result in lower grade may lead to less time spent studying
performance on the final exam, unless there outside of class and less learning because the
is a large random component to the grade. student can obtain the same final grade with
Regression analysis showed that scores on lower performance on graded assignments
the final exam were higher the closer a stu- and exams.
dent was to a grade cut-off, although the Further complications to the model to
effects were not large. In essence, a student account for differences in student situations
within 1 percentage point of the nearest are topics for future studies. How much stu-
grade cut-off scored 1.4 percentage points dents learn from a course is a function of
higher on the final exam than a student who what students know on entering the class
was more than 4 percentage points from the and their innate aptitude for the subject. The
nearest grade cut-off. professor does not control this student input
Other aspects of student behavior related or preexisting condition, but it may affect
to course policy can be added to the student the relative effectiveness of different peda-
model. For example, professors often are gogies. The problem is an intertemporal one
interested in increasing student attendance where a student chooses inputs in one period
in class because they think it will increase and the output is realized in a later period.
student learning. The education production Students may optimize multiple times while
function can be modified to include atten- taking a course, as they receive new informa-
dance as a separate argument from study tion about their performance in the course
time, ​​Li​  ​​  = ​f​  i(​​​ ​Si​  ​​, ​Ai​  ​​; ​t​ i​​, ​δ​  i)​​ ​​, where ​​Ai​  ​​​ is atten- and handle pressures from other courses or
dance in class i and S​  ​​ i​​​is then interpreted as factors beyond school. Students also may
time spent studying outside of class. Studies not be fully informed about their personal
of attendance would be interested in the par- educational production function and how it
tial derivative would work best for them. The grade func-
tion also may contain errors because of inac-
∂ ​G​  ​​ ∂ ​g​  ​​ ∂ ​K​  ​​ curate assessment or student responses to
(3) ​​  ___i  ​  = ​ ___i  ​ ​  ____i  ​  .​
∂ ​Ai​  ​​ ∂ ​Li​  ​​ ∂ ​Ai​  ​​ grade incentives.
These additional factors suggest that time
preference and risk aversion may be import-
ant in explaining student learning and may
10 Oettinger (2002) assumes that students are grade- be worth including in learning models in
driven and that they do not receive any utility from learn- economic education. Of course, it is possible
ing independent of their grade. Utility from learning
would mitigate some of the role of these nonlinear grading that students do not behave “optimally,” as
incentives. this type of model would suggest. Grimes
 Allgood et al.: Research on Teaching Economics to Undergraduates
(2002) finds that students in a principles of
macroeconomics course are o­ verconfident in
their grade expectations, and he argues that
“predictive miscalibration” may explain some
of the student dissatisfaction with introduc-
tory classes. As previously discussed, how-
ever, the model and empirical results from
Oettinger (2002) suggest that students are
strategic in how they allocate their effort.
Student grades cluster just above grade
cut-offs, and they update in a rational way
in response to grades obtained during the
semester by studying more if grades on a
midterm are low and studying less if grades
on a midterm are high.
5.  Alternative Teaching Methods
and Practices
Economics courses are affected by the
decisions that instructors make and other
factors that influence the conditions under
which a course is taught. The instructor also
has to select a textbook, if one is used, and
determine how to teach the class based on
its size. A major decision is the selection of
the primary teaching method, so it should
not be surprising that the use of alternative
teaching methods, either to replace the tra-
ditional lecture or in addition to it, is a topic
studied in economic education research.
The usual reason for adopting alternative
methods is to get students actively engaged
in the learning process because a tradi-
tional lecture class is viewed as too passive
a form of instruction. In addition to instruc-
tor decisions, departmental and institu-
tional policies related to the weight given
to teaching in faculty evaluations, teaching
loads, teaching experience, and class sizes
may influence the use of different teach-
ing methods (Harter, Schaur, and Watts
2015). Over the past two decades, a num-
ber of books and articles have been pub-
lished that describe how faculty members
can use interactive teaching methods such
299
as discussion, c­ lassroom experiments, case
studies, cooperative learning, assessment
techniques, writing-to-learn strategies,
context-rich problem solving, and experi-
ential learning (e.g., Walstad and Saunders
1998; Becker and Watts 1998; Bergstrom
and Miller 2000; Salemi and Hansen 2005;
Becker, Watts, and Becker 2006; Salemi and
Walstad 2010; Hoyt and McGoldrick 2012).
Empirical research on the effectiveness
of different teaching methods is difficult to
conduct for a number of well-known reasons.
First, the treatment has to require a sufficient
amount of instructional time and be well-ex-
ecuted so there is a meaningful difference in
student experience using one method com-
pared with another. Second, investigations
often are affected by the nonrandom assign-
ment of students to treatment and control
groups and there can be differential attrition
of students from groups. Third, outcomes
measures or their proxies, such as test scores,
grades, student evaluations, or enrollment in
subsequent economics courses, may not fully
capture the effects of the treatment. Fourth,
the implementation of a treatment may vary
by instructor within a college or university or
across institutions, causing problems when
data are aggregated. Fifth, students may react
to the treatment by deciding to take efficiency
gains from a teaching innovation as additional
time spent on other courses or on leisure.
Sixth, Institutional Review Board (IRB) pol-
icies can restrict the collection of student data
and limit research control. Given the difficul-
ties of designing a controlled comparison and
the challenging econometric issues, it should
not be surprising that there has been a lim-
ited amount of research on the effectiveness
of different methods of teaching economics,
despite the passionate advocacy for many of
them.
5.1 Classroom Experiments
The classroom use of experiments is a
change in pedagogy that alters the education
300 Journal of Economic Literature, Vol. LIII (June 2015)
production function (δ), and as equation (2)
emphasizes, such a change may or may not
lead to measurable changes in outcomes or
learning. Several careful studies that address
many of the empirical research complica-
tions listed above show positive results from
the use of experiments, but the effects can
vary. Emerson and Taylor (2004) found that
the use of classroom experiments in micro-
economics courses increased TUCE scores,
but did not affect departmental exam scores,
student evaluations, or student attrition.
Dickie (2006), too, concluded that the use
of experiments increased TUCE test scores,
but discovered, surprisingly, that adding a
grading incentive to reward students for par-
ticipation and success in the trading experi-
ments moderated achievement gains.
In an extensive study, Durham, McKinnon,
and Schulman (2007) introduced experiments
into both micro and macro introductory eco-
nomics classes, and had control groups where
experiments were not used. Although assign-
ment to treatment and control groups was
not randomized, it was also not announced
that the classes would be taught differently.
The analysis was conducted across semesters
to control for factors such as the time of day
for a course and class size. A total of sixteen
classes produced a sample of 750 students
in microeconomics and a sample of 830 stu-
dents in macroeconomics. They analyzed the
effects of each experiment (eight in micro
and five in macro) by including three specific
questions for each experiment on a test. The
large sample sizes allowed them to measure
overall treatment effects for the semester and
for each topic on which there was an experi-
ment. In addition, they were able to analyze
how those with different learning styles were
affected by the experiments. In micro, they
found that the treatment group performed
three percentage points higher overall, but
the treatment effects for separate topics
ranged from a high of thirty-nine percent-
age points to minus eleven points. They also
reported that the achievement gains from
using experiments varied across students
based on their learning styles, with learners
who were multimodal or kinesthetic benefit-
ing the most and learners who prefer a read-
write approach benefiting the least.
How course instruction is provided in
experiments or what students are asked to
do for the experiment also makes a differ-
ence. For example, using a wireless interac-
tive teaching system to conduct experiments
improves students’ achievement in principles
classes, compared with students who only
discuss results from published experiments
(Ball, Eckel, and Rojas 2006). Achievement
gains are also greater when students have to
write a report on the experiment experience
(Cartwright and Stepanova 2012). Equation
(2) suggests that this pedagogical change can
increase student learning by increasing stu-
dent effort ​​( ​f​  Si ​ ​ ​  ___i  ​ )​​or by increasing learn-
∂ ​S​  *​  ​
∂ ​δ​  i​​
ing given unchanged effort   ​​(​f ​  δi ​)​  ​​. The result
from Cartwright and Stepanova suggests that
it is the additional effort from writing the
paper, and not the experiment, that matters.11
5.2 Cooperative Learning and Peer Effects
There is widespread enthusiasm for coop-
erative learning, in which students work in
small groups to achieve common objectives.
One reason instructors adopt this teach-
ing practice is to encourage collaboration
and foster trust, which contributes to the
building of social capital (Algan, Cahuc, and
Shleifer 2013). Cooperative learning and
peer effects imply that learning is a func-
tion of the effort and knowledge of other
students. In this strategic environment,
students will choose how much effort to
supply, given the effort and knowledge of
their peers or those in their group who can
11 It may also be the case that students who know they
have to write a paper on an experiment give more effort
during the experiment.
 Allgood et al.: Research on Teaching Economics to Undergraduates
affect the ­outcomes. It is difficult to com-
pare studies of cooperative learning in eco-
nomic education because there are many
types of group activities, and how they are
conducted might affect the results and the
interpretation of peer effects.
Strategic decision making by students and
factors affecting research design or imple-
mentation may explain why some of the
empirical results from studies of coopera-
tive learning are only somewhat positive or
show no effect, depending on the outcome
measured. Johnston et al. (2000) measured
the effects of collaborative problem solv-
ing in learning economics in tutorials for
intermediate macroeconomics students
and showed that although students liked
a collaborative activity, it did not increase
either exam grades or interest in economics.
Yamarik (2007), too, investigated the effect
of cooperative learning in an intermediate
macroeconomic course in a careful study
that controlled for the endogeneity of atten-
dance. He found that students in the experi-
mental group scored five to six points higher
out of a possible 200 points, but that there
were no meaningful differences between
the two groups on other outcomes such as
attendance or student attitudes (interest,
preparation, participation). At the principles
level, Marburger (2005) found that students
who worked in groups did a significantly bet-
ter job with a project on policy analysis than
students in a lecture class, but there was no
difference between students in either type
of class on a multiple-choice exam. Huynh,
Jacho-Chavez, and Self (2010) reported that
the use of collaborative learning in a princi-
ples course with a grade incentive for vol-
untary participation increased a student’s
letter grade by a third. Moore (2011), ask-
ing whether the way the professor formed
teams or the composition of small groups
influenced student ­ achievement on exams
in a principles course, concluded that peer
effects were weak.
301
Some evidence is available that peer
tutoring can be an effective way to increase
student achievement. Stock et al. (2013)
evaluated the effects of a recitation class for
an introductory economics course taught by
undergraduate peers who had experience
in upper-level microeconomics. They found
that students enrolled in the treatment sec-
tion earned higher grades and were less
likely to drop the course, even though they
were weaker students. Munley, Garvey, and
McConnell (2010) studied the effects of peer
tutoring across different subjects, including
economics, and found that participation in
such a tutoring program increased grades by
a third of a letter grade if the student partici-
pated for ten to twenty hours over the course
of a semester.
5.3 Online Instruction
The capacity to use technology to teach
and learn undergraduate economics has
increased dramatically over the past few
decades, with one significant change since
2000: online instruction. Although in-class
delivery of instruction still dominates at most
institutions, online instruction is expanding,
as are hybrid or blended courses that use
both in-class and online instruction. Unlike
the decision to adopt interactive teaching
methods, which is at the discretion of the
instructor, the decision to shift to online
instruction is often made by administra-
tors, with instructors then responding with a
change in their pedagogy. Most studies focus
on how online instruction affects students,
but the use of different teaching methods for
online instruction has implications for fac-
ulty too. The change in teaching time may
be large and one could not understand a pro-
fessor’s choice without considering start-up
costs, which may be substantial.
One important research topic is whether
students perform better in online courses or
in-class courses. Several studies that control
for student selection report that students
302 Journal of Economic Literature, Vol. LIII (June 2015)
in online economics courses attained sig-
nificantly lower test scores than students in
regular classes. Brown and Liedhold (2002)
found that if principles students who chose a
virtual class were placed in a live class they
would score 5.8 points higher (out of 100).
Coates et al. (2004) reported that online
students in principles scored three to six
items lower on a thirty-three-item TUCE.
After controlling for student selection into
online and lecture courses Gratton-Lavoie
and Stanley (2009) also concluded that the
effects of online instruction in principles are
either insignificant or negative. Taking intro-
ductory microeconomics online seems to
have a negative effect on achievement in a
subsequent course (intermediate microeco-
nomics) (Pyne 2007).12 The negative results
for online instruction in economics in terms
of course grade and course persistence are
consistent with those found in a more gen-
eral comparison of online and face-to-face
teaching using a large sample of students
across a variety of courses in thirty-four com-
munity colleges (Xu and Jaggars 2013).
A related question is whether specific
online or in-class teaching methods affect
achievement or other outcomes. It is not
clear from our model of student choice that
this pedagogical choice should matter. For
example, experiments done in class rather
than online should have the same impact on
student learning, unless there is some lost
peer effect from conducting the experiments
online. Similarly, there is no reason to expect
an online course to entice more or less effort
from students. Not surprisingly, the gen-
eral conclusion is that there is essentially
no difference. There is no observed differ-
ence in student achievement between stu-
dents taught using experiments online and
12 Calafiore and Damianov (2011) found that the
amount of time that a student spends online increases
student achievement, so they posit that we need a better
understanding of how the new technology is used.
in-class (Carter and Emerson 2012). A ran-
domized study of a hybrid lecture course in
principles of microeconomics that used both
face-to-face and online instruction, com-
­
pared with a traditional lecture course using
only face-to-face instruction, reported lower
achievement for hybrid students, but the dif-
ference was relatively minor (2.5 points on a
100-point scale) and there was no difference
in attendance or withdrawal rates (Joyce
et al. 2014). As for homework, Kennelly,
Considine, and Flannery (2011), and also
Hernández-Julián and Peters (2012), found
that the way a student completes a homework
assignment, either online or on paper, does
not affect their achievement on a particular
section of the exam related to that assign-
ment content.13 There also are no apparent
differences on overall student achievement
based on whether homework was from an
online package and auto graded (Aplia)
or was instructor assigned and instructor
graded (Lee, Courtney, and Balassi 2010).
With respect to student evaluations of
teaching, Avery et al. (2006) found that the
mean scores for online and in-class student
ratings were essentially the same, although
the response rate was lower online. In their
investigation of in-class versus online experi-
ments, Carter and Emerson (2012) found no
effects on either course or instructor ratings.
The use of new technology may or may not
be beneficial to student learning depending
on how important of a change it is for students
and how intensively they use it. Evidence
from several studies shows that using
­technology to provide supplemental aids for
student learning in traditional classrooms
does not have much effect on achievement in
economics. Rankin and Hoass (2001) found
13 Hernández-Julián and Peters (2012) also reported
that students who submitted homework online completed
more assignments than students who completed them on
paper, but that students who submitted homework online
had lower attendance, presumably because they did not
have to show up to class to turn in their homework.
 Allgood et al.: Research on Teaching Economics to Undergraduates
that the use of PowerPoint slides in class did
not alter student grades, student attitudes
towards economics, nor teaching evaluations.
Harter and Harter (2004) reported that stu-
dents with access to optional online quizzes
perform no differently on a subset of final
exam questions than students without access
to the quizzes. Savage (2009) showed that
students who use an information technol-
ogy allowing them to record the lecture and
later download it do not perform better on
the final exam than students without access
to this technology. These insignificant results
may arise because the changes are not that
important and students could still learn the
content in other traditional ways (note tak-
ing, using study guides, or talking with other
students). In spite of the research results, the
use of PowerPoints and online homework
assignments are the more common changes
adopted by instructors. These changes likely
reflect the low startup costs, as well as the low
costs of use for these two technologies.
5.4 Class Size
Whether class size is controlled by an
instructor often depends on the nature of the
institution, faculty status, administrative deci-
sions, and the role of the course in the cur-
riculum. Instructors may have some influence
over the size of the undergraduate class they
teach through such factors as course difficulty,
the time of day a course is offered, and class-
room location. Therefore, class size is a ped-
agogical variable that can be as important as
the selection of a teaching method in affecting
student outcomes. Large class size is highly
correlated with certain pedagogy (lecture) and
grading schemes (multiple-choice exams),
and most studies do not account for these
differences when evaluating the role of class
size on student outcomes. Watts and Schaur
(2011) estimated that the median class size is
forty-four students in introductory courses,
thirty students in intermediate courses, twen-
ty-five in statistics and econometric courses
303
and also upper-division field courses. These
median estimates mask considerable variation
in class size by type of institution and within
institutions. The most variance is found
among principles courses. Some large public
institutions often offer large lecture classes for
introductory economics, whereas more selec-
tive private colleges offer smaller classes.
Early studies of introductory-course class
size were almost unanimous in finding no
influence on standardized examination test
scores as class size rises above a critical level
of about twenty students (Kennedy and
Siegfried 1997), but more recent studies have
detected significant negative effects as classes
become larger. Becker and Powers (2001),
using TUCE data from many institutions,
found that as class size increased, academi-
cally weak students were more likely to drop
the class. Arias and Walker (2004), in a study
of student achievement at one institution
with total exam points as the outcome mea-
sure, found a negative effect of large classes
(eighty-four to eighty-six students) com-
pared with small classes (twenty-five to twen-
ty-six students) on performance in principles
of economics. Kokkelenberg, Dillon, and
Christy (2008) used a data set of grades given
over twelve years in courses at five colleges
within a highly selective research university.
They concluded that class size has a negative
effect on student grades and creates disecon-
omies of scale, which are largest as class size
rises from six to twenty students, more mod-
erate as class size increases from twenty to
forty students, and minor for class sizes with
more than forty students. Fournier and Sass
(2000) found that smaller classes (sixty or
fewer students) taught by teaching assistants
increased the likelihood that students would
subsequently take an upper-division course.
Finally, Bedard and Kuhn (2008) reported
that increasing class size has negative effects
on student evaluations of teaching.
Research indicates that smaller classes are
preferable to larger classes because students
304 Journal of Economic Literature, Vol. LIII (June 2015)
in smaller classes appear to learn more,
persist longer in a course, more frequently
enroll in subsequent courses or learn more
in them, and give more positive instructor
and course ratings. Smaller classes also make
it easier for instructors to use alternative
pedagogical methods that actively engage
students. Whether a small class or large
class takes more instructor time to teach is,
however, not obvious. Sometimes teaching a
small class with time-intensive pedagogy and
the grading of many written assignments can
require more time and effort than teaching
a large class that uses lecture and machine-
graded multiple-choice tests.
5.5 Textbooks
The selection of a textbook for an eco-
nomics course is a choice variable for many
instructors. Past studies of achievement
in introductory economics found that the
choice of textbook does not appear to mat-
ter, probably because of the homogeneity
in textbook features and content coverage
among the leading principles of economics
textbooks (Walstad, Watts, and Bosshardt
1998; Lopus and Paringer 2012). The same
conclusion still holds true in light of more
recent studies. For example, Tinkler and
Woods (2013) examined differences in the
readability of principles of macroeconom-
ics textbooks and concluded that “we were
not able to say which of the popular books
we studied is the most readable” (p. 188).
This relative homogeneity also makes it dif-
ficult to separate textbook differences from
instructor effects. Some evidence to support
this conclusion is found in a Canadian study
by Pyne (2007), who investigated the effects
of different introductory microeconomics
textbooks on student achievement in subse-
quent economics courses, and in particular
in intermediate microeconomics and money
and banking. He concluded that while in
some cases the initial textbook had an effect
in subsequent courses, “in most cases, it is
impossible to reject the hypothesis that most
textbooks produce identical results in stu-
dent learning” (p. 294).
5.6 Benefits and Costs of Alternative
Pedagogies
Even if research studies show that certain
teaching methods are superior to others and
the benefits are large, there is a cost to a fac-
ulty member to adopt them, both in learning
about the new innovation and learning how
best to use it. There also may be increased
costs for students if the new methods induce
them to spend more time on their economics
courses. Economists are trained in research
during their graduate education, but for the
most part, they receive little training in teach-
ing or the use of different pedagogical tech-
niques (McCoy and Milkman 2010; Walstad
and Becker 2010). As class size increases,
more effort is required to use active learning
because there are more students to involve
(Svinicki and McKeachie 2011, p. 268).
How faculty perceive the value of time for
teaching relative to time for research and the
rewards for teaching and research at their
institution is likely to affect the adoption of
new teaching methods (Allgood and Walstad
2013).
Because benefits of a teaching innovation
are usually uncertain and adoption costs are
undoubtedly positive and often substantial,
adoption benefit–cost calculations favor
the traditional lecture as the steady-state.
Adoption of an alternative teaching innova-
tion is likely to be more of an exception or
supplement to traditional instruction. Survey
evidence indicates that there has been rela-
tively minor adoption of interactive teaching
methods in courses, in spite of the growing
interest in them. The main evidence comes
from a replicated survey of teaching and
assessment methods in economics at differ-
ent types of institutions conducted in 1995,
2000, 2005, and again in 2010 (Watts and
Schaur 2011).
 Allgood et al.: Research on Teaching Economics to Undergraduates
6.  Course Requirements and
Student Behavior
Economics professors not only choose
course teaching methods, they also set most
of the course policies that students must
follow to succeed. Grading and attendance
polices have the potential to influence stu-
dent behavior such as study time. Course
expectations about the use of mathematics
or quantitative reasoning can affect student
achievement.
6.1 Study Time and Grades
According to Babcock and Marks (2011),
time devoted to academics by the average full-
time student has fallen from forty hours per
week in 1961 to twenty-seven hours in 2004.
Our model of student behavior suggests that
the two routes by which this could happen is
if changes in teaching have greatly improved
the rate at which students convert study time
to knowledge or the rate at which study time
is converted to a desired grade. The former
presumes that studying increases knowledge
and grades and the latter implies grade infla-
tion—or a change in the desired grade.
Most early research found little significant
relationship between study time and grades,
but more recent evidence suggests a posi-
tive and significant link. Stinebrickner and
Stinebrickner (2008) estimated the causal
effect of studying on the GPA of freshmen
using data obtained from a twenty-four-
hour time diary kept by students at different
times during their first semester. Roommate
assignments were random at the small liberal
arts college. Their strategy for identification
was based on the notion that study differ-
ences between otherwise similar students
would be due to roommate characteristics,
which they proxy with whether or not the
roommate brought a video game to college.
They found no important differences in class
attendance or study efficiency between the
two groups of students, but found that study
305
time ­mattered. Although the ordinary least
squares estimates indicated that one extra
hour of study time per day increased GPA by
only 0.038 points, similar to the results from
past research, the instrumental variable esti-
mate showed that one extra hour of studying
each day increased GPA by a meaningful 0.36
points. They conclude that the difference
between the two estimates was the result of
students altering effort during the semester
in response to the grades they received, an
effect they call dynamic selection.
In another study that addressed dynamic
selection in macro principles, Bonesrønning
and Opstad (2012) found that increased study
effort improves test scores, but the study
time effect was smaller than that reported
by Stinebrickner and Stinebrickner (2008).
The authors hypothesize that some of the
difference may be attributable to differences
in samples and differences in the impact of
studying for a grade in single course versus
studying in all courses to improve an over-
all GPA. Swinton (2010) used transcript data
from an institution that required instructors
to report two grades for each student: one for
effort and one for content knowledge. The
effort grade was assigned by each instruc-
tor based on their overall perception of the
student’s effort during the course and such
factors as class attendance and participation.
The effort grade was found to have a posi-
tive and significant effect on the knowledge
grade in all model specifications.
Given that study time is positively related
to grades and that more knowledge is related
to higher grades, we can think about how
grades, homework, and exams can be used
to improve student effort and learning.
Babcock (2010) developed a model of learn-
ing that assumes that grades are an increasing
function of study time. He concluded that a
tougher grading standard leads higher-ability
students to increase effort to meet the higher
standard whereas lower-ability students
deem the higher standard unattainable and
306 Journal of Economic Literature, Vol. LIII (June 2015)
give up, creating an ambiguous net effect on
grades. He found that average student study
time is 50 percent lower in a class where the
average expected grade is an “A” compared
to a class where the average expected grade is
a “C.” Because economics courses often have
lower course grades than other disciplines, it
is possible that students are already allocat-
ing a disproportionate amount of study time
to their economics classes.14
Grade-motivated students with high dis-
count rates may need supplemental incen-
tives, such as graded homework, to study
when an exam is not imminent. To the extent
that graded homework increases the quan-
tity and quality of study time, it should lead
to more learning and higher grades. Students
also may divert study time from other courses
to complete a graded assignment, or divert
time from other tasks in the same course, so
that total study time is unchanged. In this
case, measured learning will not increase
unless the assigned homework has a higher
marginal product of learning than what stu-
dents would otherwise do with that time.
Grove and Wasserman (2006) found a pos-
itive relationship between graded homework
assignments and exam scores for students
in principles of microeconomics. Artés and
Rahona (2013) reported a similar result by
randomly assigning students graded home-
work assignments during an introductory
economics course and a public finance
course. They found that students perform
better on exam questions corresponding to
the required graded problems and that the
effect was greatest for those in the bottom
third of the distribution, based on entrance
exam scores. Grodner and Rupp (2013)
reported similar effects for graded home-
work. It is difficult, however, to distinguish
14 In different circumstances, it could be the case that
low-ability students might put more study time into a hard
class to meet a minimum standard even if the marginal
return to studying is low (Bonesrønning and Opstad 2012).
the effort induced by the graded homework
assignment from the direct contribution
to learning that comes from the content of
the assignments (Trost and Salehi-Isfahani
2012). Are students doing better because
they are induced to study more, or do the
assignments have incremental value even if
they displace an equivalent amount of study
time in the same course?
The effect of grades on behavior may result
from competition among students or con-
cerns about relative position in the grade dis-
tribution. Bigoni et al. (2011) conducted an
experiment using 114 students in an under-
graduate econometrics class in Italy in which
students took an exam under three different
schemes. They found that the greatest stu-
dent effort was generated in the most com-
petitive environment and the least amount of
effort was exerted in the cooperative scheme.
A model where student utility depends on
perceived own ability and competition can
provide feedback on ability relative to oth-
ers (Wang and Yang 2003). The theoretical
results suggest that low-ability students may
supply less effort to avoid direct competition
and a negative assessment of their perceived
own ability. Tran and Zeckhauser (2009) told
students at a Vietnamese university how they
ranked in a class based on their academic
achievement. This information created an
incentive for them to do better in the class,
suggesting a relatively simple and low-cost
way to motivate students.
Student risk aversion about grades might
be harnessed to enhance academic achieve-
ment (Nalley and McKenzie 2011). A
risk-aversion strategy that an instructor might
use would be to assign homework problems
and grade only a randomly selected portion
of them. The evidence about such a proce-
dure indicates that students in a principles
course and a managerial economics course
do not alter their assignment behavior
because of this change in grade risk (Miller
and Westmoreland 1998), perhaps because
 Allgood et al.: Research on Teaching Economics to Undergraduates
the change is too small to be perceived
as meaningful. When the risk incentive is
greater, student behavior may change. As
previously discussed, Oettinger (2002) pre-
dicts that students decrease effort on their
subsequent exam if their previous grade was
high, unless the random component of the
grade is large. Of course most instructors
want to decrease the randomness in their
grading rather than increase it. Increasing
the random component is a high cost to pay
for mitigating the incentive to slack off after
a good performance on an exam.
If students strategically respond to grade
signals, it may be that they strategically
respond to alternative grading schemes. A
common faculty practice is to allow students
to retake exams or to drop low exam scores.
MacDermott (2013) compared the perfor-
mance of students in an intermediate mac-
roeconomics course using three classes with
different grading schemes: all three in-term
exams given count towards the final grade,
the lowest in-term exam score is dropped in
calculating the final grade, and students can
replace their lowest in-term exam score with
the score of a cumulative exam given the last
day of class. He found that allowing students
to drop their lowest in-term exam score
actually improved student achievement on
the cumulative final exam by 4.4 percent-
age points, relative to counting all exams,
but having students take an additional (i.e.,
“make-up”) exam to replace the lowest exam
score did not. One explanation he offers for
the dropping result is that the cumulative
final exam in his class may have kept students
from shirking.
6.2 Attendance
There have been various attempts to
determine if either attendance or an atten-
dance policy itself affects student learning.
Most results indicate that those students who
choose to attend class achieve more, even
after accounting for other factors. Cohn and
307
Johnson (2006) found that grades and atten-
dance in a principles course are positively
related and part of the relationship stems
from the independent effects of effort and
aptitude as reflected by GPA and SAT scores.
They also discovered that missing many
classes reduces student achievement on tests,
but poor test scores do not seem to create a
feedback effect of discouraging future atten-
dance. Krohn and O’Connor (2005) ana-
lyzed aggregated data from teaching three
intermediate microeconomics courses and
found that attendance was positively related
to the average points earned in the course
for the semester, but it did not affect indi-
vidual exam scores, perhaps because there
was less variability in attendance between
exams than over the semester. Stanca (2006)
tackled the issue of unobservables by esti-
mating three different models to control for
unobserved heterogeneity and reported that
attendance had a significant positive effect
on achievement. Marburger (2001) showed
that students who miss class on a day when
particular content is taught were significantly
more likely to get test items wrong about that
content than students who attended that day.
Lin and Chen (2006), however, found that
the effect of day-of-attendance on corre-
sponding test scores diminishes when a con-
trol for the student’s overall, or cumulative,
attendance is included, but it is not obvi-
ous why cumulative attendance attenuates
day-of-attendance effects. In yet another
study, Chen and Lin (2008) used a random
assignment experiment to estimate average
attendance effects on students and found
that attending class corresponded to a 9 to
18 percent increase in scores.
Although empirical evidence generally
supports the proposition that attendance
improves student achievement, it does not
imply that a policy of punishing absentee-
ism or rewarding attendance will necessar-
ily improve achievement. As discussed with
the model of student choice, attendance
308 Journal of Economic Literature, Vol. LIII (June 2015)
and study time may be substitutes, so that
requiring greater attendance may lead to
less studying. Incorporating attendance into
grades also alters how grades are computed
in a class, which may increase or decrease
overall student effort. Comparing student
achievement in economics courses taught
with and without such a policy, Marburger
(2006) found that although the expected
attendance gap developed, it had only a
small total effect on achievement by the
end of the course. A policy of requiring stu-
dents scoring below the median on the mid-
term exam to attend class during the second
half of the course may improve achieve-
ment even when controlling for other mea-
sures of student effort (Dobkin, Gil, and
Marion 2010). Self (2012) concluded that
a policy that punishes students for skip-
ping class, rather than one that rewards
students for good attendance, was more
effective in reducing absenteeism, but she
did not investigate whether the difference
in the attendance policy affected student
achievement.
6.3 Mathematics Aptitude
Many studies purport to relate math-
ematics and verbal aptitude (or ability) to
learning and understanding undergraduate
economics at various levels, but unfortu-
nately most of these studies confound apti-
tude with education or training. A student’s
performance on such tests may reflect edu-
cation (taking courses), effort or motivation,
and what might be considered natural apti-
tude.15 Krohn and O’Connor (2005) ­suggest
15 The “ability bias” problem pervades studies that
attempt to assess the effectiveness of education. At a more
general level, Heckman and Vytlacil (2001) show that edu-
cation and cognitive ability are so strongly related that the
wage effects of the two cannot always be separated, even
with large samples. In empirical terms, this means that the
effects of ability and schooling on earnings are all interac-
tion terms, and no single variable effect, implying that it
may be futile to try to separate the effects.
that for certain shapes of the learning curve
relating effort to grades, high-ability stu-
dents may have higher grades but lower
marginal learning rates for a given level of
effort. In this case, high-ability students
would have less incentive to respond to
pedagogical changes designed to induce
greater effort and learning.
Most studies have shown that verbal,
quantitative, or composite college entrance
examination scores (SAT, ACT) are pos-
itively correlated with TUCE, course
examination results, and course grades in
introductory college economics courses
(Becker 1997; Siegfried and Walstad 1998).
The quantitative or mathematics scores
seem to be especially important for both
introductory economics and intermedi-
ate micro and macro theory course per-
formance (Butler, Finegan, and Siegfried
1994; Siegfried and Walstad 1998; Arnold
and Straten 2012; Elzinga and Melaugh
2009). Similar findings have been reported
for South Africa (Parker 2006), the Middle
East (Kherfi 2008), the Netherlands (Arnold
and Straten 2012), and the United Kingdom
(Lagerlöf and Seltzer 2009). The result
persists whether student self-reported or
administrative data are used to measure
mathematics preparation (Haley, Johnson,
and McGee 2010).
Disentangling the effect of mathematics
aptitude from mathematics training on learn-
ing economics is difficult because students
who are more likely to take a calculus course
prior to taking economics generally have high
mathematics aptitude scores. Bosshardt and
Manage (2011) matched about 3,000 other-
wise similar students in pairs that either took
or did not take a calculus course prior to eco-
nomics to separate the effects of precalculus
aptitude from learning calculus. They found
that both mattered, but mathematics apti-
tude dominated mathematics course taking.
The effect of taking a calculus course was
moderated substantially, once mathematics
 Allgood et al.: Research on Teaching Economics to Undergraduates
aptitude was controlled by their matching
procedure.16
A few studies find that neither c­ ollege-level
mathematics courses nor the score on a
mathematics achievement test improve
achievement in college economics (Cohn
et al. 1998; Parker 2010). These conflicting
results could reflect the fact that typical mea-
sures of mathematics aptitude or achieve-
ment measure different quantitative skills.
Ballard and Johnson (2004) found that the
most important quantitative determinant of
principles performance was students’ scores
on the mathematics ACT college entrance
exam. They also discovered that having taken
a calculus course, a remedial mathematics
course, or a basic mathematics quiz each
made independent contributions to explain-
ing performance in introductory economics.
They showed that quiz questions pertaining
to basic concepts of arithmetic, algebra, and
geometry were most important. In a similar
vein, Schuhmann, McGoldrick, and Burrus
(2005) found that basic quantitative skills,
such as being able to solve a system of equa-
tions and compute a percentage, and being
able to interpret increases and decreases on
a graph, contributed most to learning princi-
ples of economics. Using pre- and post-test
mathematics exams in an economics course,
they discovered that principles students
learn some pure mathematics, and the extent
of the mathematics learned contributes to
the economics learned.
In contrast to the conclusion that basic
mathematics skills are of greatest value for
16 From a longer-term perspective, selection bias also
affects measures of the return to mathematics aptitude.
Song, Orazem, and Wohlgemuth (2008) studied the return
to postgraduate schooling from 1976 to 1998. It rose even
faster (from 32 percent to 67 percent) than the return to
a bachelor’s degree (25 percent to 45 percent) over the
period. But the postgraduate return is understated because
bachelor’s degree recipients with stronger mathematics
skills and weaker verbal skills are more likely to take a job
after receiving their bachelor’s degree than to seek further
education.
309
learning introductory economics, Orlov and
Roufagalas (2012) found that the score on a
more sophisticated three-question “cognitive
reflection test” (CRT) had a positive effect on
test performance in upper-level economics
classes. The CRT contains questions whose
apparent answers are incorrect, such as “A
bat and a ball cost $1.10 in total. The bat costs
$1.00 more than the ball. How much does the
ball cost?”17 The questions require reflection
beyond the initial incorrect response, which
they argue is characteristic of many economic
problems studied in more advanced courses.
6.4 Cheating
Cheating is often modeled like criminal
behavior with students who expect a higher
benefit being more likely to cheat and stu-
dents who expect a higher cost being less
likely to cheat. Such a model predicts that
students facing higher penalties from cheat-
ing, or who perceive a higher probability of
detection, are less likely to cheat (Kerkvliet
and Sigmund 1999). These simple models,
however, ignore differences in the types of
cheating. For example, students who cheat
on a take-home assignment may use cheat-
ing as a substitute for study time, but stu-
dents who copy answers from other students
during an exam may have realized they are
not going to perform as well on the exam as
they expected even if they did study.
Research on cheating poses unique chal-
lenges. Cheating behavior will be driven by
attitudes towards honesty, which is an omit-
ted variable for which there are likely to be
no good proxies. Magnus et al. (2002) found
that Russian students are the most tolerant
of cheating and the least tolerant of those
informing on cheaters, whereas the oppo-
site is the case for U.S. students. Although
studies using students from a single college
17 The answer ($1.05 for the bat and $0.05 for the ball)
is be found by solving a system with two equations and two
unknowns.
310 Journal of Economic Literature, Vol. LIII (June 2015)
or university may not have the same degree
of heterogeneity as can be observed by
cross-country comparisons, there still will be
unmeasured differences in attitudes towards
cheating that are difficult to proxy even in
studies at individual institutions. There are
also types and forms of cheating that will
have different determinants and require dif-
ferent policies to control.
Perhaps of greater concern for research
on cheating is the difficulty collecting data,
which has been done in many ways: asking
students if they cheated (Bisping, Patron,
and Roskelley 2008); using random response
surveys (Nowell and Laufer 1997; Kerkvliet
and Sigmund 1999); surreptitious methods
(Nowell and Laufer 1997); or statistical meth-
ods to infer that students cheat (Harmon and
Lambrinos 2008). Regardless of the data col-
lection method used, the results indicate that
students do cheat and that efforts to raise the
cost of cheating lower the frequency of cheat-
ing. Attitudes towards cheating, however, also
seem to be important (Bisping, Patron, and
Roskelley 2008) and universities and profes-
sors may be able to shape those attitudes.
The growth of online education and the
greater difficulty of monitoring academic
honesty in these settings suggest there will
likely be greater research in this area in the
future. As Harmon and Lambrinos (2008)
note, it may be possible with time constraints
and randomly selected exam questions to
offer unproctored exams that are not more
susceptible to cheating than p­ roctored exams.
Of course, the question of how to deal with
plagiarism and other forms of cheating in
massive online courses with tens of thousands
of students may depend on new technology.
7.  Teacher Change and Teaching
Effectiveness
The teaching of undergraduate econom-
ics courses is affected by many factors, one
of which is the composition of economics
f­ aculty who will teach the course and another
of which is future changes in teaching tech-
nology. Economics instruction also can be
influenced by how teaching is evaluated and
rewarded. Most colleges and universities rely
on student evaluations of teaching and some
use peer review of teaching as measures of
teaching effectiveness. Providing training
for economics faculty and graduate students
also can reduce the cost of becoming a better
teacher and can increase teaching skills with
alternative methods, thus changing the class-
room pedagogy.
7.1 Teacher Composition and Change
Economics majors and nonmajor stu-
dents who take undergraduate econom-
ics courses are usually taught by the same
faculty. Teaching loads measured in total
course assignments (undergraduate plus
graduate courses) per year and numbers of
undergraduate economics majors per faculty
member for 2012 are reported by institution
type in table 1.
There are pronounced differences in
the teaching loads across the different
institutions. Economics faculty at public
PhD-granting institutions teach substan-
­
tially fewer courses than economics faculty
at other public institutions, and at least some
of that teaching is in small economics grad-
uate classes. The same is true for econom-
ics faculty teaching at PhD-granting private
institutions, relative to economics faculty
teaching at other private institutions. The
other outlier is the number of economics
majors per economics faculty member at
PhD-granting public institutions, where the
­student-to-faculty ratio is much higher than
at any other type of institution. These eco-
nomics professors, however, often receive
teaching assistance from graduate students
who are working on PhD degrees. Given
their large size, the public PhD-granting
institutions struggle to provide as rich or as
intensive of an educational experience for
 Allgood et al.: Research on Teaching Economics to Undergraduates 311

Table 1
Economics Faculty Course and Student Loads

Institution type Full time BA degrees Courses BA degrees per

(observations) faculty per year per year faculty member

Public PhD (71) 25.1 216.0 3.6 8.6

Public Masters (34) 14.0 40.8 4.9 2.9

Public Bachelors (74) 9.1 26.2 5.8 2.9

Private PhD (29) 29.7 126.7 3.4 4.3

Private Sel. Liberal Arts (65) 9.8 46.9 5.1 4.8

Private others (63) 6.2 20.7 6.0 3.3

Source: Supplemental data obtained from the 2012 UAQ of the American Economic Association.

economics majors as is found at selective A response to this situation is to change the

liberal arts colleges and other smaller insti-
tutions. On the other hand, the public PhD-
granting institutions are generally more
financially accessible than private colleges
and universities.
University professors who teach and also
are heavily involved in research often face
a trade-off between the two responsibili-
ties, but economists may be especially sen-
sitive to it. A study of faculty teaching at
­PhD-granting institutions found that econ-
omists allocated less time to teaching than
professors in other disciplines (mathematics,
physics, political science, psychology, and
business) and more time to research than all
but one discipline (physics), indicating that
economists are more likely to consider the
time cost of teaching (Allgood and Walstad
2013). Growing pressure for more research
from economists at almost all institutions
is likely to adversely affect time devoted
to undergraduate teaching, adopting new
teaching methods, or teacher training.
composition of the faculty who teach eco-
nomics at these institutions by hiring more
full-time faculty in nontenure-track positions
as teaching specialists under such titles as
lecturers, professors of practice, and clinical
professors. In 2011 the mean percentage of
full-time, nontenure-track faculty weighted
by faculty size was 15 percent for the 83 top
PhD-granting departments of economics,
7.3 percent for the top 189 national liberal
arts colleges, and 11.8 percent for economics
departments at the top 107 regional masters
institutions (Ehrenberg 2012, p. 198). The
percentages will likely grow as departments
experience an increasing division of labor
between research and teaching responsibil-
ities and colleges and universities seek to
control costs.
Increasing the share of full-time faculty
who are hired based on teaching effective-
ness at PhD-granting institutions is likely to
improve instruction because these faculty
are more likely to be dedicated teachers and
312 Journal of Economic Literature, Vol. LIII (June 2015)
free of research obligations, and although
they usually teach more courses per year
than tenured or tenure-track faculty, their
teaching loads are comparable to those of
faculty at institutions that do not emphasize
research (Ehrenberg 2012). Evidence sup-
porting this hypothesis comes from a study of
15,662 freshmen who entered Northwestern
University between 2001 and 2008. It found
that students who took a first-semester course
from a nontenure-track faculty member with
a longer-term relationship with the univer-
sity (not a temporary lecturer or part-time
adjunct) were 7.5 percentage points more
likely than those who had a tenured or ten-
ure-track professor to take a second course in
the same subject, and earn a higher grade in
the subsequent course (Figlio, Schapiro, and
Soter 2013). Adding full-time, nontenure-
track faculty at other types of institutions is
likely to be more problematic because it will
be difficult to attract talented teachers on a
nontenure-track basis (Ehrenberg 2012).
­ has been for new instructional technology in
The general topic of how full-time, nonten-
ure-track faculty will affect the teaching of
undergraduate economics merits further
study across different types of institutions.18
The other major change to the teaching
of undergraduate economics will come not
from faculty or students, but from technol-
ogy. Instructors and students now have at
their disposal technological tools for learn-
ing inside and outside of the classroom.
Studying the effects of technology in the
teaching of undergraduate economics is
not new because each decade produces
18 Another issue is the use of part-time, adjunct instruc-
tors in place of full-time tenured or tenure-track faculty,
but it seems to be more important in professional fields
(e.g., business) than in economics, which may not employ
many part-time adjuncts. The overall evidence on that dif-
ference is mixed, with Bettinger and Long (2010) reporting
positive effects from adjunct instructors on encourag-
ing student enrollment in other courses in a field and
Ehrenberg (2012, pp. 200–201) reviewing findings that
first-year persistence rates and graduation rates decreased
when students were taught by adjunct instructors.
i­ nnovations.19 The 1960s saw the introduc-
tion of televised lectures. In the 1970s, it
was mainframe computers and videotapes.
For the 1980s, it was the microcomputer. In
the 1990s, searching on the Internet rose to
prominence, while the 2000s brought large-
scale adoption of laptop computers and
online instruction. Now in this decade we
see the further expansion of online instruc-
tion such as through Massive Open Online
Courses (MOOCs) (Banerjee and Duflo
2014; Hoxby 2014; Cowen and Tabarrok
2014) and the advantages and disadvantages
of smart phones in the classroom. This use
of technology is likely to lead to the democ-
ratization of education (Acemoglu, Laibson,
and List 2014) and reduce educational costs
(Ehrenberg 2012). How this new technology
will affect teachers and how effective it will
be for improving student learning outcomes
in undergraduate economics or other college
subjects is an ongoing research subject, as it
higher education in past decades. 20
7.2 Student Evaluations of Teaching
At many colleges and universities, student
evaluations of teaching (SETs) at the end of
a course are used as one of the major con-
siderations in the assessment of the teaching
quality of faculty, in spite of the criticisms
that perpetually surround such evaluations
(Becker and Watts 1999). SETs indicate what
students think about the teaching quality of
an instructor. This leaves open the question
of whether student ratings of teaching q
­ uality
19 For some history, see Siegfried and Fels (1979);
Becker (1997); and Walstad and Saunders (1998).
20 The uncertainty about the effects of change in
instructional technology is reflected in a survey of 350
presidents of four-year colleges and university presi-
dents (Selingo 2014). It found that 81 percent of the
presidents thought that hybrid courses (face-to-face plus
online) would have a positive impact on American higher
­education in the future, but only 2 percent gave the same
response for MOOCs and 52 percent thought they would
have a negative impact.
 Allgood et al.: Research on Teaching Economics to Undergraduates
are sufficiently accurate to provide useful
information. The answer is yes for two rea-
sons. First, SETs provide a regular and large
stream of convenient data for researchers to
investigate, so it should not be surprising that
SETs are one of the most studied topics in
economic education. Second, the aggregation
of findings across studies reveals some fairly
consistent insights regarding what affects stu-
dent opinions of teaching. Regardless of their
validity, SETs are relevant if they impact fac-
ulty behavior. If faculty compensation is tied
to SETs, or if faculty review them to see what
works and what does not work, then they
alter the costs and benefits faculty face when
choosing how to teach and how much time to
devote to teaching.
Studies in the 1980s and 1990s found
that SET scores were influenced by student
perceptions of instructor characteristics or
actions such as enthusiasm, clarity of pre-
sentation, organization, signaling (using oral
statements to draw attention to an upcom-
ing point), ability to explain material, skill in
answering questions, questioning and prob-
ing to maintain active student involvement,
accepting students’ ideas, rapport with stu-
dents, and “fair” grading practices (Siegfried
and Walstad 1998). More recent studies rein-
force the earlier findings. Organization and
clarity still seem to be the most important
attributes of effective economics instructors
from the students’ perspective (Boex 2000),
and SETs still are affected by student percep-
tions of teacher qualities such as preparation,
clarity, interest in students, “fair” grading
procedures, and recognizing when students
do not understand the content (Ragan and
Walia 2010). The general conclusion from
research on SETs is that student opinions are
largely influenced by what instructors do in
the classroom or for the course. Such actions
are generally considered to be good teaching
practices that should be encouraged.
SETs are subject to sample selection
bias because not all students complete a
313
course, and, among those students who
do, not all submit a SET (often because of
absences). SETs are biased upward because
students who do better in a course or who
are more committed to a course are more
likely to complete a SET (Kherfi 2011).
Consequently, economics instructors read-
ing their SET ratings may think they are
better teachers than they really are. This
upward bias may explain why SET scores are
often above average on a typical scale such
as 1 to 5. Studies using SETs show that they
can be influenced by a personal characteris-
tic that may or may not be related to teaching
productivity, such as the appearance of the
instructor (Hamermesh and Parker 2005),
gender, race, and age (McPherson, Jewell,
and Kim 2009; Kherfi 2011), or proficiency
with the English language (Finegan and
Siegfried 2000). SETs also typically are not
reported to faculty or administrators in a way
that permits them to be used meaningfully,
such as whether an individual faculty mem-
ber’s SET score is significantly different from
the department average or from the average
of similar departments with tougher grading
standards (McCullough and Radson 2011).
7.3 Effective Teachers and Grades
Perhaps the most controversial issue
related to SETs is whether they can be used to
identify more effective teachers. Weinberg,
Hashimoto, and Fleisher (2009) showed that
while SETs and grades from the same eco-
nomics course are positively related, SETs
were unrelated to learning in subsequent
courses once current grades were controlled.
Their research casts doubt about the value
of high SETs for identifying effective teach-
ers in economics, and is consistent with the
findings from a controlled study of calculus
professors and student learning in calculus
courses (Carrell and West 2010).
SETs are often used to evaluate faculty
for salary, tenure, or promotion decisions,
provoking the criticism that instructors can
314 Journal of Economic Literature, Vol. LIII (June 2015)
“buy” higher student ratings through some
type of manipulative practice such as award-
ing higher grades. On this issue, Isely and
Singh (2005) found that economics students
who expected to receive higher grades in
a class were more likely to give generous
teaching ratings. Controlling for unobserved
course-specific, instructor-specific, and
semester-specific effects, McPherson (2006)
also found evidence that instructors can con-
taminate SET scores by raising grade expec-
tations. In a broader study using data across
fifteen different disciplines, Matos-Díaz
(2012) concluded that adjusting academic
standards to raise the expected grades of stu-
dents could be used to increase SET ratings
and enrollments. When Wellesley College
lowered grades in high-grading humanities
and social science departments, average SET
ratings of instructors in the affected depart-
ments all declined (Butcher, McEwan, and
Weerapana 2014).
Economic theory demonstrates that the
mixed empirical findings can be explained
by accounting for the behavioral responses
of students and professors. Kanagaretnam,
Mathieu, and Thevaranjan (2003) showed
that whether SETs are manipulated by pro-
fessors through “soft grading” depends on
the emphasis given to SETs within an institu-
tion. When the emphasis is low or moderate,
professors are less constrained by SETs and
can use a strict grading policy that does not
foster grade inflation; but when emphasis is
high or excessive, professors may respond
with inflated grades. Another model draws
the similar conclusion that more reliance
on SETs for evaluating teaching increases
the likelihood of grade inflation and can
decrease faculty teaching effort (Love and
Kotchen 2010).
If factors affecting SETs such as grade
inflation, selection bias, variations in class
size, and particular differences in the char-
acteristics of faculty or courses are deemed
inappropriate influences on SETs used for
personnel decisions, they can be more or less
excised. Although a number of schemes have
been proposed over the years to adjust SET
scores for such unwanted influences (e.g.,
Becker 1999; Ragan and Walia 2010), appar-
ently few department or university admin-
istrators are willing to use such adjustment
schemes because the adjustments them-
selves can generate criticism. If either raw or
adjusted SETs are used for faculty evaluation,
they must be interpreted in clear recognition
that they only measure students’ opinions or
perceptions, but are not necessarily accu-
rate measures of teaching effectiveness. In
view of these criticisms, it is surprising that
SETs continue to be used as the primary
required measure of teaching effectiveness
in economics departments at almost all col-
leges and universities (Becker, Bosshardt,
and Watts 2012). The inertia (which itself is
a topic worthy of more research) is probably
due to the lack of a widely accepted alter-
native that is as efficient to use on a regular
basis as SET scores.
7.4 Alternative Assessment of Faculty
Teaching
Along with SETs, another way to evalu-
ate teaching effectiveness is peer review, in
which a designated faculty member evalu-
ates the teaching practices of another faculty
member. In its simplistic form, peer review
includes classroom visits and consideration
of course syllabi, SET scores, and other
teaching materials from an instructor. This
information is used to prepare an evalua-
tion statement by one faculty member about
the teaching of another faculty member. In
a more complex form, peer review might
require an instructor to prepare and submit a
detailed teaching portfolio documenting his
or her teaching work. The portfolio would
include items like course syllabi, descriptions
of teaching materials, video examples of
teaching, samples of assignments and exams,
data on course grade distributions, SETs,
 Allgood et al.: Research on Teaching Economics to Undergraduates
letters from students, and a written state-
ment of teaching philosophy and teaching
innovations. The teaching portfolio provides
a broader array of evidence for judging the
teaching contribution of an instructor.
Peer assessments, in either simple or com-
plex form, are time-consuming to conduct,
relative to using SETs, and so are usually
reserved for major decisions such as tenure
or promotion. They are used in some form
at only 54 percent of institutions (Becker,
Bosshardt, and Watts 2012). Peer reviews,
too, can be subjective and imprecise mea-
sures of teaching as indicated by several
questions that must be confronted to con-
duct them properly. Who is qualified to do
the peer evaluation? What are the criteria for
writing the assessment? What is the standard
for comparison? Nevertheless, peer reviews
of teaching have the significant advantage of
considering context of teaching inputs and
outcomes that extend beyond just student
opinions as reported on SETs. Peer review
also generally is acceptable to most faculty
members because it is used to evaluate fac-
ulty research, so in this respect, the practice
as applied to teaching is familiar to faculty.
7.5 The Value of Teacher Training
New PhD economists typically receive
limited teacher training as a part of their
graduate education. About half of the eco-
nomics departments that permit graduate
students to teach their own courses require
no formal departmental training in teaching
(McCoy and Milkman 2010; Walstad and
Becker 2010) and almost half of economics
graduate students report that they received
no preparation for teaching (McGoldrick,
Hoyt, and Colander 2010). As a result, grad-
uate students and new PhD economists
often begin their teaching careers with inad-
equate knowledge of fundamentals such as
course design, principles of effective presen-
tation, and assessment of student learning.
They also may not know about interactive
315
s­trategies and instead are likely to rely on
lecture because it is the method used most
often in their graduate courses.
The history of providing teacher educa-
tion and pedagogical resources for econom-
ics instructors shows that it is more effective
when the teaching staff or the developers are
economists who have expert knowledge of
both economics and education because it is
difficult to demonstrate how different meth-
ods can be used to teach a wide array of eco-
nomic content (Goodman, Maier, and Moore
2003; Salemi 2003; Salemi and Walstad 2010;
Maier, McGoldrick, and Simkins 2012). A
key advantage of teacher training programs
and related resources is that they reduce the
time cost for economics instructors to learn
how to use new pedagogical techniques,
thus making the adoption of new teaching
methods relatively more attractive from a
­
benefit-cost perspective.
One comprehensive example is the
Teaching Innovations Program (TIP) in eco-
nomics conducted over a six-year period for
335 economics professors, funded by the
National Science Foundation (Salemi and
Walstad 2010). In its first phase, economics
instructors attended a residential workshop
to learn how to use interactive teaching
methods as an alternative or supplement to
the traditional lecture. The second phase
consisted of a voluntary program of online
instruction and mentoring to help the eco-
nomics instructors use a teaching innovation
in their classrooms. A third phase offered
participants an opportunity to contribute to
the scholarship of teaching economics by
making conference presentations or writing
papers about their pedagogical experiences.
Evidence of the value of the program in
affecting teaching comes from a longitudi-
nal survey administered to participants from
one to four years after the program ended
(Walstad and Salemi 2011). It revealed that
95 percent of the participants thought that
the program improved their teaching. When
316 Journal of Economic Literature, Vol. LIII (June 2015)
asked to cite what changed, they identified:
(1) learning how to use interactive teaching
techniques (87 percent); (2) engaging more
students in the learning process (79 per-
cent); and (3) becoming more motivated to
teach (56 percent).
Concerns, too, have been raised about
how the increasing number of new PhD
economists and graduate student teaching
assistants (TAs) who are foreign and nonna-
tive English speakers may affect the quality
of undergraduate education because these
instructors may have trouble communicating
with students and be less comfortable with
interactive teaching methods (Ehrenberg
2004). Borjas (2000), in an early study of the
issue, concluded that foreign-born TAs had
an adverse effect on the learning of under-
graduates in principles courses. Based on
an analysis of their teaching skills, he con-
cluded that “. . . additional class preparation
may resolve the teaching difficulties encoun-
tered by foreign-born TAs.” (Borjas 2000,
357). Fleisher, Hashimoto, and Weinberg
(2002) controlled for the teaching skills of
foreign-born TAs at a large public univer-
sity where all such TAs participated in a
­one-term graded seminar on teaching meth-
ods in economics that was taught by a senior
faculty member. They found no evidence
that foreign TAs adversely affected either
student grades or whether or not students
enrolled in a subsequent economics course,
although students gave the foreign-born
TAs lower teaching evaluations. We know
little, however, about how new PhDs who
are nonnative English speakers perform in
undergraduate courses, the value of teacher
training for this group, and what effects their
increasing numbers will have on the teaching
of undergraduate economics.
8.  Conclusion
The last JEL survey on the teaching of
undergraduate economics was published
almost two decades ago. Since then, several
hundred relevant research studies have been
completed. We also have more information
about the short-term and long-term effects
of majoring in economics or taking eco-
nomics courses. Our purpose in this review
was to survey the recent literature and offer
insights about the status of the teaching and
learning of economics in the undergraduate
curriculum. We specifically prepared the
review so that it would be of value to aca-
demic economists who teach undergradu-
ates and want to know more about it beyond
their personal perspective or experiences,
and also to administrators who are respon-
sible for managing courses and curricula in
economics departments.
Most academic economists teach under-
graduate courses either for majors, or
more broadly for undergraduates taking
principles or other economics courses,
or they have taught such courses during
their careers. This connection with under-
graduate teaching, in combination with a
natural curiosity about what is happening
inside and outside of the classroom, may
lead them to conduct a research study in
economic education. In this research pro-
cess, an economist identifies an interesting
pedagogical or learning question, secures
data on students, and then analyzes the data
using econometric methods to control for
rival hypotheses. This scientific approach
to the study of questions about the teach-
ing and learning of economics has advanced
research in economic education, perhaps
to a greater extent than the study of teach-
ing in most other disciplines. What is most
impressive, and should be emphasized as a
major concluding point, is that the empir-
ical studies surveyed in this review come
from academic institutions ranging from
PhD-granting research universities to small
private liberal arts colleges, reflecting the
broad interest among academic economists
in undergraduate teaching.
 Allgood et al.: Research on Teaching Economics to Undergraduates
The economics major and the teaching of
economics are central to the undergradu-
ate curriculum at most colleges and univer-
sities. Students are more likely to major in
economics than they are in other quantita-
tive subjects such as mathematics, statistics,
chemistry, or physics. The combination of
verbal and quantitative skills developed by
studying economics make it attractive as a
double major for those students who have
selected other popular majors such as busi-
ness or a natural science. Economics is also
important for nonmajors. About 40 percent
of all undergraduates take at least a prin-
ciples course and a large fraction enroll in
other economics courses to enrich their
understanding of public finance, labor,
health, international trade, and other topics
studied by economists.
The coursework for the economics major
has not changed substantially since 1980,
with most institutions requiring the same
set of ten courses (two principles, two inter-
mediate theory, statistics or quantitative
analysis, and five electives). The number of
institutions requiring a course in economet-
rics has increased substantially, suggesting
the growing importance of technical rigor in
the discipline and the value of numeracy in
the workplace. A decrease in the number of
programs requiring a course in money and
banking reflects waning interest in particular
topical coverage. Despite these changes in
coursework, the general goal for the econom-
ics major has remained the use of economics
concepts to show students how to think like
an economist. Students who major in eco-
nomics also recognize this goal as primary.
The short- and long-term outcomes from
the major are positive. Undergraduates who
earn a degree in economics are generally
satisfied with their major choice. This major
serves as a flexible springboard to future
pursuits, whether it be a professional degree
(MBA or law), graduate study in economics,
or an employment option, which is selected
317
by most undergraduate economics majors
after graduation. Adults in the labor force
who majored in economics earn more than
those with business or other majors, although
they may work more hours to achieve those
earnings. Their economic education also
seems to influence both their willingness to
assume risk in later life and their prudence in
managing personal household finances.
The theoretical framework economists use
more generally is valuable for thinking about
teaching and learning in the classroom.
Economics professors make many instruc-
tional choices that set course parameters.
They select the teaching methods used in the
classroom, whether it is passive lectures or
interactive classroom experiments or cooper-
ative learning. Class size can factor into these
decisions because it influences the teaching
time cost for an instructor and the perceived
effectiveness of different teaching methods.
Instructors choose the learning technology,
be it just the textbook or extensive use of
online instruction. They set course require-
ments in terms of assigned homework, the
number of exams, and attendance and cheat-
ing policies. During the course, students
make choices too, given the course parame-
ters, on how much time to study, how often
to attend class, and how to react to the grad-
ing scheme of the professor.
Both professors and students allocate time
to a course, professors to teaching and stu-
dents to learning. How much time gets allo-
cated depends on individual preferences and
choices. A professor may adopt a new peda-
gogy (e.g., auto-graded homework or a new
textbook) even if it does not increase student
learning because it saves instructional time
that can be reallocated to research or leisure.
Similarly, if an economics instructor adopts
a new teaching technology that makes learn-
ing economics more efficient for students,
they may reallocate the recovered study
time to other courses or leisure. As a result,
an empirical study of the effects of the new
318 Journal of Economic Literature, Vol. LIII (June 2015)
technology may find no change in student
learning of economics.
This review of the empirical studies offers
some tentative conclusions about particu-
lar topics. Although there are too many to
summarize here, some are worth noting to
illustrate the range. The evidence on the use
of classroom experiments and cooperative
learning shows consistent positive effects on
student achievement, but for other teaching
methods the research is either too limited
or the results too ambiguous to draw defin-
itive conclusions. Teaching an economics
course online instead of face-to-face seems
to have a negative effect on student learn-
ing, but there appear to be no learning dif-
ferences when online technology is used to
replace in-class methods for such activities
as classroom experiments and homework.
Students appear to benefit significantly from
being taught in small classes, based on such
outcomes as achievement and persistence in
enrolling in subsequent economics courses.
The choice of a textbook for most princi-
ples or intermediate courses probably is
­inconsequential for learning because of the
similarities in content coverage and peda-
gogy found in most textbooks.
Student behavior contributes to student
learning, which may seem obvious, but the
more important question is how. Perhaps
the most effective way that professors can
increase student learning is to figure out
ways to increase student study time or effort
because of the strong positive relationship
found between study time (effort) and eco-
nomic knowledge or grades. Yet it is chal-
lenging to decide what to do. For example,
adopting a tougher grading scheme that
requires greater effort may have a differ-
ential effect on high-ability students (study
more to get a good grade) and ­low-ability stu-
dents (study less because it is futile). Policies
designed to increase class attendance may
improve student grades if they induce stu-
dents to study more; but if a­ttendance
becomes a substitute for out-of-class study
time, the policies may not be effective. And if
a change in course policy causes students to
substitute study time in economics for study
time in other disciplines, our colleagues in
history, math, and political science may be
less enthralled with our clever teaching tac-
tics than are we economists. Some students
avoid studying and the grade consequences
through cheating, which seems to be driven
by student attitudes that universities or pro-
fessors can influence by increasing the prob-
ability of detection and consequent costs.
The composition of faculty is likely to
change in the future because of the addi-
tion of more nontenure-track faculty.
Technological forces also will likely alter the
delivery of economics content and teaching
methods. We do not yet know, however, the
specific ways in which these personnel and
technological innovations will affect eco-
nomics instruction in the future.
Finally, we considered teaching effective-
ness—how it is measured and what can be
done to improve it. Higher education in gen-
eral, and economics in particular, does a poor
job of assessing teaching by relying so heav-
ily on student evaluations. Although SETs
provide information about what students
think about their economics instructors,
they are a poor measure of student learning.
Unfortunately, the alternatives to SETs are
more time-consuming and they, too, are sub-
jective. One direct way to improve under-
graduate economics instruction is to provide
teacher training for graduate students and
young faculty members, but it can be costly
and the incentives to participate are murky.
An ongoing development that may boost
teaching quality in some economics depart-
ments is the hiring of more full-time teach-
ing specialists.
There are many opportunities for fur-
ther study of issues described in this survey,
as well as other topics related to econom-
ics teaching and learning that may come to
 Allgood et al.: Research on Teaching Economics to Undergraduates
mind as economics instructors engage in
classroom instruction. We encourage such
investigations to advance our understand-
ing of economic education in colleges and
universities.
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