In November, Steve Estelle’s Financial Algebra class embarked on a creative project designed to teach his students a lesson in price fluctuations, with a little help from the American Institute for Economic Research.
When the project started the expectation was that there would not be a lot of price changes in Great Barrington stores during a ten week time span. When we returned to Mr. Estelle’s Monument Mountain High School class in March, we were surprised by the outcome.
Through the three-month period, students diligently collected prices at four agreed-upon locations for ten items that they would typically buy. Gasoline prices declined, as expected. However, bacon and Mountain Dew also changed prices through these weeks, which was unexpected. In fact, the price of bacon declined a lot! Here is the chart showing price changes:
The educational value of this exercise is undeniable. Students not only understood how a price index is constructed, what a market basket is, and how inflation (or deflation) affects out-of-pocket expenses. But they were also involved in the actual field research, methodically gathering data and recording it.
There was an “Aha! moment” among students when they realized that not only gasoline prices change from week to week. Even though we have a perception that the price of soda is stable, it was refreshing to learn that it does fluctuate. Students noticed that if the goods are cheaper, it allows them to have extra money in their pockets.
Mr. Estelle has assigned a final assignment to his students. Each student will synthesize and present what they’ve learned in papers, artwork, presentations, or a small book. We hope to be invited to see these creations.
The Student Price Index project is an example of creative innovation based on the AIER’s Everyday Price Index, which reflects price changes felt by Americans on a regular basis, measuring prices of items that they buy frequently, like food, utilities, fuel, and prescription drugs.
Mr. Estelle was part of the 2014 class of AIER’s Teach-the-Teachers Initiative. Participating teachers learned a lot and were inspired to innovate in their classrooms.
Registration for Teach-the-Teachers 2015 is now open! Learn how AIER can help you bring economic concepts to a classroom near you.