Three ways economics can make you a better student

Three ways economics can make you a better student

The clock is ticking down towards the start of the semester. You know those scenes in films where a military unit is checking all their gear, lining up their sights, strapping themselves in? That’s what university students are doing right now. You can hear (or overhear) it in the conversations on campus.


Take this one, for instance:

Student 1: “So, what happens in tutes, then? Do you need to bring the textbook?”

Student 2: “Um…maybe? Dunno. D’you know if it’s an easy subject?”

Those were first years, figuring out how exactly it is you go about studying at university, and trying to pick low-hanging-fruit electives.


Here’s another:

Student 1: “I’m not falling behind this semester.”

Student 2: “Yeah, me too. Gonna do the reading.”

Student 1: “Yep. Gonna do it before class.”

No points for guessing that these were returning students, promising themselves they’ll do at least some things differently this time – try to improve on their past performance by learning from past mistakes.

Striving to succeed

Ultimately these conversations and many like them are all about working out how to do well. Whether first year or fifth year, trying to get good grades is the often-stated objective. That there’s a drive to maximise marks won’t come as a surprise to anyone – least of all economics students who know (or, for the first year economics students, are about to learn) all about abstract theories of rational agents who live solely to maximise…well…whatever they choose to maximise, really.

Economics students should have the upper hand in more than just theorising conversations like these, though. In fact, by applying the very principles they learn to their own studies, economics students should be able to get better marks than other students. So let’s look at why they should (in theory), and why they don’t (necessarily), with some study tips straight from economic theory.


Create incentives to keep commitments

One of the big problems when it comes to studying is building and maintaining good study habits throughout the semester. Economists have written a lot about intertemporal decision making, and when it comes to deciding whether to do the hard work now, or put it off until later. It turns out that people find it hard to resist the latter option. Think of this as borrowing from yourself in the future to pay yourself in the present. Problem is, when we get to the future, we often refuse to pay back the debt by doing the work. We’re now just in another present, where we face the same sort of choices, and tend to make the same sort of decisions.

So how do you force your future self to keep the promises you’re compelling it to make to your present self? A commitment device, of course! Take the example covered by WNYC’s Radiolab of Zelda Gamson, who wanted to quit smoking, but kept trying and failing – so she wrote a cheque for $5,000 that would be paid to the Ku Klux Klan if she ever smoked again. There’s an episode of Freakonomics dedicated to commitment devices and their use in a range of circumstances, including dieting, gambling and domestic abuse.

In the introductory statistics subject that I teach at the University of Melbourne, Quantitative Methods 1, when exam time rolls around I encourage students to build their own commitment devices to help them study. A simple suggestion is to come up with a list of, say, ten concepts that you want to learn. Find a friend, and give them $50. To get the money back, they get to ask you to explain or define those ten concepts (preferably in an order of their choosing) and you only get the money back if you get them right. If you don’t get them right, the friend keeps the cash.

There are many variations you could build into this to make it a little more gentle (get $5 per question answered correctly, for example) or a little more harsh (like Zelda, pledge the money to a person or group you don’t like). I’d recommend making an appointment too – arrange to meet for the test at the end of a few days, so that you have set a deadline. Speaking of deadlines…


Making deadlines

If we’re so fallible that we can’t keep promises to ourselves, then what’s the point in setting arbitrary deadlines. I mean, we’ll just break them, right? Well, not necessarily. Consider this study by Ariely and Wertenbroch, which suggests that self-imposed deadlines actually are effective in getting people to complete tasks.

Note, though, that those self-imposed deadlines had to involve penalties (in the study, students were able to choose their own deadlines, with penalties for late submission based on their own chosen deadline). So just putting a note in your calendar telling yourself that you need to finish the first draft of an essay by mid-April, to give you time to revise it by the due date in May, isn’t likely to cut it. There needs to be a penalty. Once you’ve mastered designing commitment devices, this shouldn’t be too hard to come up with.


Use your unwillingness to lose

Suppose you can get two free tickets to a movie if you complete a specific task. Compare this to the alternative in which you have two free tickets to a movie and unless you complete a specific task, you’ll lose them. Loss aversion, as it’s known to behavioural economists, is the idea that people will exert disproportionate effort to avoid loss than they will to secure a gain. In other words, the theory suggests that if you already have two free tickets, you’ll be willing to work harder to avoid losing them than you would have worked in order to win them.

Lots of students already think this way about marks, and talk about how many marks they lost on an assignment, rather than how many marks they won. But in my experience, both as a student and a teacher, they tend to do so separately for each piece of assessment. Why not do it for the subject overall?

Draw up and print out an academic transcript with your subjects for the semester. Write down the mark for each of your subjects as 100. After each piece of assessment, reduce the mark accordingly. Treat the marks as yours from the first day of semester. If loss aversion works, you’ll work much harder to keep those 100 marks on the transcript if you imagine you already have them than you will if you think of it as something you’re working to earn.


More than the sum of its parts

Ultimately, a good study strategy will (or should) do more than just help you get good grades. If you actually study well, you’ll come away having really learned the core ideas and principles of the material you’re studying (which is much more important both for the short run – when you move on to other subjects based on prerequisite subjects you’ve already completed – and the long run – when it’s your actual ability to use and apply the skills, techniques and concepts long after you’ve studied the subject). So here’s hoping a little economic theory can help you do both at once. Best of luck with the coming semester, everyone.