Arnold Kling  

Economics in the Classroom

Economic Communication Prize... A Health Care Experiment...

An anonymous teacher says,

I was desperate -- every day I went home feeling like I was escaping a war zone -- and so I set up a classroom economy, a variant of what the behaviorists call "token reinforcement." I printed up bills for $1,$5,$10 etc., as in "real" money, set up bank accounts, wage and price schedules, the works. Everything students might want to do cost something, whether it was visiting the restroom between recesses, computer time or using art materials. In turn, they could earn money in a variety of ways.

...I hated the complexities involved, but I did like the results -- I saw a turnaround almost immediately.

Initially, requirements were quite easily met to earn classroom dollars -- so many minutes on task, so many items completed, homework handed in etc. Every week the prices changes (not unlike the real world), and the most valued reinforcers, like computer time, went up in price while less popular ones (like using the library) went down. A by-product of this system is that students got fairly proficient at operations with decimals and real-word money skills as well as understanding some basic economic principles around supply and demand.

...I could have phased out most of the system -- in fact I did "fade out" many of the specific rewards -- but the students enjoyed being little capitalists so much I couldn't shut it down completely.

Don't ask where I was wandering when I stumbled across this.

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COMMENTS (23 to date)
Unit writes:


TGGP writes:

I remember reading that blog a while back. I think I discovered it at Sailer's or GNXP.

FC writes:

I give up. Was this written by Lenin or Deng Xiaoping?

tc writes:

Didn't you plug Ayres' "Super Crunchers" a while back? Behaviorism as a means of maintaining classroom order is a part of methods like Direct Instruction, Success for All etc - not coincindentally, the ones with a track record of results.

KDeRosa writes:

Bear in mind that for a token economy like this to motivate students in the first place, it is necessary for the student to be sucessfully learning and capable of perfroming at a high rate.

Therefore, the instruction has to be designed so that students will succeed. Effective instruction is a precondition for a token economy to work. Unfortunately, most teachers do not know how to effectively teach lower performing students so it becomes impossible to motivate the student such as by using a token economy. Motivating students is primarily an instructional problem.

Unless the student sees the goal as something personal, something he wants to do, and unless he receives evidence that he is capable of achieving the goal, the motivational program will fail (at least with most students).

Once the effective instruction is in place, a token economy like this can be used to motivate students who are not "internally motivated" by the joy of learning.

By using payoffs to get them started, the teacher can systematically build up "motivation." At first the child is interested only in the specific payoff--the candy or the extra recess. As he learns, he receives other payoffs, such as praise for good work. After a while he learns to treat the payoff more as a symbol of his competence than as an end in itself. And he learns that the work itself was perhaps less than fun but certainly not punishment. Finally the student will be willing to work for nothing more than the praise and sense of achievement associated with performing well.

I suspect there is an economic lesson in here somewhere. Maybe one of you economists can elucidate.

Troy Camplin writes:

The whole point of the token economy is to get students to do their work and turn it in so that they will be able to successfully learn. In fact, I would not be surprised if this approach were far more successful with students who weren't doing well at all. Academic students -- those who are on their way to college -- may be motivated by "love of learning," but most students, especially in middle and high school, could actually care less about learning anything (sorry to burst the liberals' ideological bubble here, but that's the plain truth). It would also help if schools actually taught these students something of value to them, but this is a wonderful idea for precisely those students you don't think should be exposed to it. Of course, since this token economy would also expose students to how an economy works and motivate them to work hard, I'm sure most on the Left would vehemently oppose such an idea precisely for those reasons. Can't have the poor doing better and not needing welfare -- what would we need the Left for?

KDeRosa writes:

Academic students -- those who are on their way to college -- may be motivated by "love of learning," but most students, especially in middle and high school, could actually care less about learning anything

This is a common misperception. The causation is backwards. Academic success breeds a love for learning, i.e., motivation to learn more; whereas, failing to learn serves to unmotivate a child a to learn more.

Here's a good experiment. Grab a classroom full of exceotionally smart and motivated third graders and try to teach them an advanced calculus class in which they could only answer about 40% of the of the material correctly (a typical percentage for low performing/unmotivated students). You will soon have on your hands a classroom full of students with behavior and motivation problems just like the low performaers. They will fail to retain the material, rely on the teacher for help, not exhibit self-confidence, and continue to make the same sorts of mistakes again and again.

liberty writes:

"This is a common misperception. The causation is backwards. Academic success breeds a love for learning, i.e., motivation to learn more; whereas, failing to learn serves to unmotivate a child a to learn more."

Then how come no matter how much they lower the standards, inner city school systems still fail to motivate the children?

KDeRosa writes:

Lowered standards are only tangentially related to what goes on in the classroom. Generally, lowered standards take the form of lowered cut-scores on a standardized test. Passing the test with 50% correct still tells the student he is fairly dumb adn is wasting his time with the fancy book learning. Moreover, most of these students never learn to read well which presents a constant stream of neagative feedback every day in school since reading is such an integral part of learning.

So, I suppose the standards and what is being taught have not yet been lowered enough to matter to low performers.

KDeRosa writes:

To appreciate just how far behind most inner city kids actually are, you'd want to take at this article by Zig Engelmann.

Troy Camplin writes:

It's not a "common misperception," it's a fact: some kids are just dumb; others are not and never will be academically inclined and are interested in other things. People are not intellectually, motivationally, or temperamentally equal. Nor are they equally interested in the same things. I have had students who were brilliant in a subject and could care less about it. I've had other students who were fascinated by subjects that they could barely pass. I've known students who were smart enough to go to college, but would rather fix cars or become electricians or plumbers. There are individual, cultural, and local social differences among students and what will motivate them. Until we acknowledge this and abandon these ridiculous fantasy-based egalitarianist beliefs about students, education is going to continue to get worse and worse.

Randy writes:


I don't disagree. We need a system that doesn't channel people in accordance with the vision of the elite. And what KDeRosa is saying matches my own experience. I had to find my niche before I learned to love learning. Personally, I'd like to see the education system be much more market driven - private specialists and contractors rather than education factories. I don't suppose I'll see it in my lifetime, but I still toss out the idea every chance I get.

Troy Camplin writes:

Everyone has to find their niche. Some of us take longer than others. But for too many who talk about education "love of learning" means love of academics. And many, if not most, students could care less about academics.

KDeRosa writes:

Troy, let me suggest that your observations are not as universally applicable as you think. In fact, they are only accurate so long as the instruction the students receive is poor, which is typically the case. However, when the instruction is well-done, your observations don't hold. See here.

IQ certainly does matter in education, especially when the instruction is poor. Not as much when it isn't, at least at the K-12 level. See here and here.

Students should have the right to make their own academic choices; however, most of these choices have been foreclosed to a majority of students by the end of elementary school and there's not a whole lot of highly g-loaded stuff being taught then.

It is the continued reliance on the excuses you cite and the lack of incentives in the present system to improve instruction that is causing the failure in education.

Arnold Kling writes:

I agree with those who say that most students do not love learning. If they did, we would not need the token economy called grades.

To put it another way, if students loved learning, then they would not be as hung up on grades as they are.

KDeRosa writes:

Which came first? the chicken or the egg? The love for learning or the academic success?

Let's look at some data from Project Follow Through, the largest education experiment in US history. In PFT, the DI model raised student achievement of Title I students about a standard deviation, from the 20th percentile to the 50th percentile. All the students were tested with the Coopersmith Self-Esteem Inventory and the Intellectual Achievement Responsibility Scale (IARS). The Coopersmith measures children's feelings about themselves and school; the IARS measures the degree to which children take responsibility for their successes and failures.

The DI students scored significantly higher in these affective measures than the other students.

Here's Engelmann's interpretation of those results. "[w]e assume that children are fundamentally logical. If we do our job of providing them with experiences that show they are smart, they will conclude that they are smart. If they experience success in school that can also be measured in the neighborhood, those experiences serve as fuel for the conclusion that students are competent. At the time of the evaluation, I had heard more than 100 stories of our children helping older siblings learn to read or do homework. The children knew that they could do things the average kid on the street could not do."

In the absence of the effective instruction, these low-performing students would not have had a love for learning, just like the control group. That's because children that are not learning in school receive a steady stream of feedback that they are incompetent. School is punishing for them. People don't love what they find punishing.

So while it's true that grades are positive reinforcers for many students. If learning activities are followed by these reinforcers, the learning activities will become conditioned reinforcers. And then learning takes place for its own sake. This is the behavioral equivalent of "love for learning."

Career Student writes:
I agree with those who say that most students do not love learning. If they did, we would not need the token economy called grades.

I have to call you on that one. The reason grades are an issue is that they breed fear (of failing the class and repeating, for example). Of course, fear is a way to motivate. But living in abject fear of the inconsistencies of the grading system is not fun.

Snark writes:
So while it's true that grades are positive reinforcers for many students. If learning activities are followed by these reinforcers, the learning activities will become conditioned reinforcers. And then learning takes place for its own sake. This is the behavioral equivalent of "love for learning."

Behavioral studies have also shown that conditioned reinforcement diminishes rapidly in the absence of any reward system. Once students (particularly teenagers) recognize there’s no pay-off, the incentive to learn for the “love of learning” disappears, and positive reinforcement is once again needed to elicit a motive for improvement.

Education (like honesty) may be its own reward, but we all know that teenagers only educate themselves about things they don’t have to study.

Troy Camplin writes:

There's no argument that the instruction in the U.S. is almost universally poor. Personally, we should fire all the teachers out there, abolish education as a major, and only hire people who don't have degrees in education. And that would be just to start things off. In the long run, I would love it if everyone were educated with the Montessori method, which is much more individualized instruction and deals with concepts. But this works well with elementary school students. It doesn't address middle and high school students, whose interests diverge rapidly. Further, we have to do away with advancing students by age, as not all students are developmentally at the same place at the same age, and we have to realize too that people do not learn in a linear fashion -- their ability to learn something resembles a catastrophe cusp fold with discontinuities. My wife teaches Kindergarten, and she has noticed that she will often have children who won't seem to learn anything at all for a long time -- and then they'll come in one day knowing everything she had been teaching them. This happens with everyone, though with some it happens more often and more quickly than with others. That is why it is important to push students, because they will get it eventually if they aren't in fact stupid (and there is that as a real problem). We are doing an incredible number of things that are incredibly stupid, because of fads and political correctness, that we also have to stop doing -- like SpEd inclusion, which prevents instruction for the rest of the class due to disruptions and the teacher having to spend so much time with the SpEd kid, while making the SpEd student feel even dumber because he can see how much smarter everyone else is. Nor have you really addressed my observation that for middle and high school we need to educated students in many areas other than college prep, which has only made the classes for those bound for college become dumbed down so that they don't learn anything, while providing an education that the students who would be better served with some sort of work training find to be utterly useless because "I'm never going to read another book when I get out of high school" -- which is true. You haven't addressed these kinds of differences in interests and educational needs. In other words, you need to address what it is that education is FOR.

KDeRosa writes:

Troy, I don't disagree that students should have alternates available so they can exercise their options outside of the standard academic sequence.

Snark, in the absence of effective instruction, motivators will not work as intended. That's the flaw in most existing studies. Providing external motivators doesn't improve the underlying instruction, which was probably causing the motivation problems in the first place.

T Carrington writes:

In this scenario, the teacher implemented this classroom economy in order to increase her students’ concentration and participation in class. Her crafty idea worked like a charm. In the economy as a whole, in order to generate efficient outputs, you must implement sufficient inputs.

In the beginning, the teacher’s inputs (teaching methods) were generating unsatisfactory outputs (student participation): (it can be implied) students were not turning in homework nor participating in class. However, once the teacher changed her inputs (teaching methods) she got new outputs (participation) from the students.

The idea of supplying goods is to offer the greatest supply at the lowest cost. In doing so, there is usually a trade off in the quality of goods being supplied. At a low cost, the teacher was able to supply the students with adequate teaching methods that were unfortunately unappealing to the students. However, at a higher cost, the teacher was able to supply the students with a higher quality of learning that was more appealing to the students. So, although the teacher had to put more time and effort into her teaching methods, her inputs generated successful and sufficient outputs. The students took more interest in her class and became more responsive and active. Thus, by changing the quality of her inputs (teaching methods), she generated more efficient outputs (students participation).

sph writes:

In my opinion the consequences of supporting a classroom like this would double your learning capacity when it comes to learning about economics. It is hard to get people interested in economics, much less get them to understand the concepts of it.

The teacher seemed intent on getting her class to understand the concept of supply and demand and of the worth of a dollar when it comes to understanding how labor, capitol and equipment affect the worth of every dollar. Most people have no idea how much energy it takes to produce a product and how their purchasing power affects whether or not that product will still be offered in the future. The effectiveness in gaining the interest of the students by offering a 'new product' (way of teaching) is how economics works. I hope my children have a teacher like this one, one who is willing to come up with new ideas, or concepts in order to produce more economically savvy students who know how the real world works. However, I know that the demand for good teachers is on the rise, and that the supply is pretty much remaining imperfectly elastic.

Matt Johnston writes:


I have to take exception with teh comment that instruction in teh United States is universally poor. It is not. It may be universally mediocre, but not universally poor. There is a vast difference. If K-12 instruction were so universally poor, then any educational successes we see must therefore be the product of outlier children and I just don't see the evidence of that.

To be sure, much can be done to improve instruction in the United States. However, just as we are talking incentives to get kids motivated about learning, we have to change the incentives for teachers, and most importantly prospective teachers, perform better. If a teacher can put together a token economy in their classroom, when then can't teachers as a group come up with an economy to address their motivational needs?

A good question for the NEA/AFT.

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