Learning to Think Like an Economist

In this section, Professor David Autor notes that 14.03 Microeconomic Theory and Public Policy is designed to expose students to three organizational components economists use to guide their work in the field. The goal of teaching students to think like economists is, ultimately, to encourage them to think analytically about high stakes topics that tend not to undergo rigorous examination in the public sphere. Professor Autor also shares how teaching through real-world applications allows students to see the components in action. 

Three Key Components: Theory, Research Design, and Evidence

This course exposes students to how we, as economists, actually practice economics. It brings together three components, the first of which is theory. These are the ideas economists use to structure our thinking in the discipline. The second component is research design, or how we go about answering cause and effect questions. The third component is evidence from well-designed studies. In the course, students learn how to use evidence, in combination with what they know about theory and research design, to ask questions about how data change their understanding of the world.

I want (students) to think analytically about topics about which most people make mere assertions.

— David Autor

That’s really how we go about doing economics: We begin with a subject that interests us. We use formal reasoning to clarify our thinking about what we should see in the world, and under what conditions. We look for a way to test those hypotheses, either by designing an experiment, or looking for a source of variation through quasi-experimental design. And then we take the data, or evidence, and conduct analyses. We then try to reach a conclusion based on the interaction between all three components. And this is what I want students to do in the course—not because I think all of them are going to become economists, but because I want them to think analytically about topics about which most people make mere assertions—but which should undergo rigorous analysis, given that the stakes are often incredibly high.

Teaching Effectively through Real-World Applications

Real-world applications, such as the minimum wage debate (PDF) in the first class session, are an important aspect of the course because they allow students to see the three key components in action. I think most educators would agree that a vivid example is more interesting than a hypothetical assertion, but the challenge is that if you just say, “Seattle raised its minimum wage, and employment did or didn’t go down,” it’s not very engaging.

If you want to make a real-world example evocative and instructive, you have to first get people to think hard about it—before they know the outcome. Asking questions such as, If we found x, what would it tell us? If we found y, what would it tell us? and What predictions can we make based on different beliefs about the world? can help set the stage for engaging learning experiences. It’s always fun to tell stories, but if you really want the students to get something out of an application, you have to design your instruction in such a way that they do work in advance to think about the application, to pre-process how the three components interact in the scenario. It makes learning the outcome so much more meaningful.