By MILLIE MUROI, Economics Writer
We’ve heard the old(er) boys argue over the optimal level of maths in economics, but they’ve delivered some imperfect information. Don’t know what I’m talking about?
Seven years after sitting my final high school economics exam, four years after farewelling university economics, and three years since exiting the economics profession (almost) entirely, I’ve been reflecting.
The reason? A clash between our economics editor Ross Gittins and UNSW economics professor Richard Holden. In the words of Dr Ray Da Silva Rosa, finance professor at the University of Western Australia, it’s the academic equivalent of the “beef” between rappers Drake and Kendrick.
Gittins last week ruffled some feathers when he said economists had lost the plot, becoming obsessed with maths and driving students away from the discipline. Holden’s response? “Shocker …even legends [like Gittins] can be wrong.” Maths, he said, is crucial to economics – and students shouldn’t be intimidated by it.
But let’s go back to why we’re talking about this in the first place: a proposed change to the NSW economics syllabus which would increase to about 35 the number of calculations a student is required to be able to perform.
And more importantly, Reserve Bank research by economist Emma Chow laying out the benefits and ways of boosting the size and diversity of the economics student population, which has plunged since the early 1990s.
Holden doesn’t think the size part is much of an issue (or at least not at crisis levels yet).
And Da Silva Rosa says it’s probably not: “Oddly, as experts who study markets, neither [Gittins nor Holden] considers that we may have about the right number of economists.” It is, he argues, simply a matter of the market allocating the optimal number through the incentive we know of as price: finance and commerce jobs tend to pay better.
But markets are far from perfect. We know – from economic theory – that prices aren’t always a good reflection of the value a good or service might provide to the wider community. That’s why, for example, the government subsidises things such as education and vaccinations (things which economics students might recognise as a “positive externality”).
Similarly, having greater economic literacy across the population comes with big benefits for society more broadly. We may not all become economists (or, in my case, stay one), but having a population with better understanding of economics leads to better policy debates and day-to-day decision-making.
There’s some merit, then, as to why we might want to boost economics student enrolments – just as we have for STEM (science, technology, engineering, maths) subjects in recent years.
I also have some doubts that financial prospects are as big a driver for students’ desire to study certain subjects in high school compared to university. In school, the focus tends to be on maximising marks or choosing the subjects that are easier or more enjoyable.
I don’t completely accept Holden’s view that students shouldn’t be intimidated by maths, either. It’s easy to say, but not always the reality. To his credit, he doesn’t necessarily think there should be more maths mixed into the high school economics curriculum.
The thing that drew me to economics for so many years – despite my lukewarm enthusiasm for maths – is just how relevant it can be to daily life (sunk cost fallacy, anyone?) and understanding the world around us (a certain US president could do with a refresher on tariffs).
Don’t get me wrong. Basic maths is a must-have for understanding economics. And I don’t buy Gittins’ argument that maths-obsessed academic economists have little regard for – or understanding of – how the economy works. As Holden points out, there’s been plenty of great research built on mathematical rigour.
But whether we need dozens of additional equations at a high school level is less certain. For me, being spared from memorising more complex formulas until second year university (and getting the choice at that point to focus more on the less maths-heavy units that interested me) kept me motivated and allowed me to specialise in areas I cared about and was good at.
And my fellow economics students who revelled in maths? They went further down the econometrics path. Economics is one of those disciplines where everyone from mathematicians to philosophers and historians can and do play a crucial role.
Would more maths in the high school economics curriculum have turned me off completely? Well, it certainly wouldn’t have had me jumping for joy.
And here’s something crucial neither Gittins nor Holden touched on. One of the key drivers of the fall in economics enrolments is the drop-off in female enrolments. I’ve spoken about why this is important last year: women economists think differently, and diverse teams simply perform better.
Maybe the quality of the economics discipline – often dismissed as the dismal science – is determined less by how much maths there is, and more by the people and perspectives missing from it. But we can’t separate that completely from the debate on the role of maths in economics.
Given the Reserve Bank’s observation that female high school economics students (who are under-represented in university economics enrolments and in the economics profession) tend to go on to preference disciplines like arts, health and law in university, there’s an argument that a heavier maths focus in high school could push more women away.
Women perform well in maths, yet tend to study it at lower rates than men. The bank suggests advocacy to females could emphasise that economists work on a breadth of social problems that are also seen in arts and social science.
One of the things I loved most was when my arts subjects would intertwine with my business ones. We can integrate economics with other disciplines, not just the obvious ones like finance, tying it more to those subjects that women have tended to favour.
Still think there should be more maths in economics? Why not turn the tables and include more economic principles in the maths curriculum?
Then there’s the need to continue to make economics – both as a career pathway and a discipline – more concrete. Among the biggest threats to high school economics enrolments is not “more maths versus less”, but the rise of business studies, which has increasingly eaten into the pool of possible economics students.
Why? The Reserve Bank says it’s partly the perception that business studies is easier to learn and teach than economics, has a lower workload and has clearer career pathways.
We need to better link economic theories, existing equations and the economics curriculum to the real world: current policy debates, trade wars and day-to-day life. Simply adding more maths at high school level risks plunging the discipline further into abstraction.
There also needs to be more connection between students and those using economics in their professional life. Through high school (and most of university) I had virtually no contact with the mythical creature I now know to be “the economist”.
Breaking down that barrier would bolster the confidence of could-be economists, inspire them to consider a career in economics, and keep economists in touch with younger generations which are often bursting with novel ideas.
I’m no longer an economist, but the things I’ve learnt – and continue to learn – have been invaluable. I’m hopeful we can find better ways to revive the discipline and attract the diversity needed to make it better. More maths wouldn’t have excited a younger me, but more connection to the real world – and to other disciplines – certainly would have.
