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February 9, 2015 Reading Time: 2 minutes

Students at Monument Mountain Regional High School are exploring a very interesting and creative twist on traditional economic indexing.

The Everyday Price Index, calculated each month by the American Institute for Economic Research, reflects price changes felt by Americans on a day-to-day basis, measuring the prices of those items that they buy frequently, such as food, utilities, fuel, and prescription drugs.

Students in Steve Estelle’s Financial Algebra class are going a step further, and creating a Student Price Index, focusing on goods and services that are most often purchased by high school students.  Their teacher, Steve Estelle, attended AIER’s Teach-the-Teachers Initiative program in June 2014. He is now implementing the lesson he learned during the program. 

First, students worked together to figure out which goods and services they buy at least once a week, and opted for a list that was a bit decadent, as you can see below. They decided in which stores in Great Barrington to record prices, and exactly which products to monitor, down to the size and packaging options of each brand:

Item

Quantity

Location

1.  Gasoline – 87 unleaded

15 gallons

Cumberland Farms, Main Street

2.  Chips – Lay’s Potato Chips, Sour Cream, Family Size

2 bags

Cumberland Farms, Main Street

3.  Donuts — regular

6

Price Chopper

4.  Bagels — regular

2

Price Chopper

5.  Arizona Iced Tea – 16 oz can

5

Price Chopper

6.  Soda – Mountain Dew, 1 liter

2

Price Chopper

7.  Coffee – medium cup, regular

3

Price Chopper

8.  Bacon, 1 pound pack

1

Price Chopper

9.  Movie ticket

1

Triplex Movie Theatre

10. Lighter — BIC

1

Mobile Gas Station, Main Street

 

Over the next 10 weeks, they will be collecting price data from these four businesses, and they will use that information to create their Student Price Index, in much the same way AIER constructs the Everyday Price Index, showing the change in prices over time.

This exercise will teach students a memorable lesson in how to build a price index, and expose them to the process of gathering price data, and the limitations of this process and these data. 

This is another example of how AIER helps teach teachers to craft interesting and engaging lessons, applying text-book material to real-life situations in a fun and creative way. 

Natalia Smirnova, PhD

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