Microeconomics is a field with a practically unlimited potential for innovative projects. As economic conditions change, new explanations are required to make economic data understandable. Hence, wherever there is a change in economic fundamentals, there is potential for new microeconomic projects. Microeconomics projects range from research projects to advanced computer simulations. Some topics in microeconomics can be treated from various angles, meaning than more than one project is possible for one topic.
1 Research Projects
The vast majority of microeconomics projects are research projects of one type or another. Microeconomics research employs tools such as statistical data, mathematics and case studies to develop microeconomic theories or to explain microeconomic phenomena. Research topics in microeconomics include goods and services, market failures, law and economics, market structures, price/income elasticity and microeconomic equilibrium. Research formats in microeconomics include research papers, dissertations, journal articles and presentations.
Game theory is a big topic in microeconomics. Game theorists use advanced mathematics to study aspects of games, such as strategy and outcomes, both for theoretical purposes and for application to real world situations (e.g. finance). Microeconomics projects involving games may involve creating games as well as playing games. Game making projects in microeconomics include board games, strategy games and stock market games. As an example, a group of college students could create a stock market game for middle school by picking 100 or so stocks off an index and allowing the students to pick a basic portfolio from among these stocks, reporting back to the students with results once a week or so.
The use of experiments in economics is relatively new. However, experiments are growing in popularity among microeconomists. Experiments in microeconomics may borrow methodology from psychology and biology. For example, one of the earliest experiments in microeconomics used psychological experimentation techniques to determine whether the indifference curve could be used to describe people's real life choices. New experiments in microeconomics could use human subjects, computer models or real life financial data. For example, a group of researchers could make a stock portfolio based on whatever investment theory they wanted to test, and then track stock closing prices over the course of the year to determine whether the theory produces portfolios with above-average returns.
4 Software and Computer Models
The use of computer software, especially spreadsheets and statistical software, is very common in microeconomics. Economists use spreadsheet programs (e.g. Excel) to create graphs and charts to present research findings. Economists design and use more complicated programs to build complex models. Advanced computer modelling is found at the intersection of economics and computer science, since it takes programming skill to build modelling software. Examples of projects that can be built using computer language include economic graph generators that produce supply and demand curves when data is entered, predictive software that predicts currency levels after changes in interest rates, and statistical software that allows the user to achieve unique data by plugging existing data into statistical formulae. An economist could create a simple exchange rate prediction program by writing a series of if, then commands in c++ that describe the various input conditions (interest rates, balance of trade, budget surplus/deficit) that influence exchange rates.
- 1 UC Berkely; How to Build an Economic Model in your Spare Time; Hal Varian; 1994
- 2 University of Maryland; Project Ideas for Economics 415; Peter Cramton
- 3 College of William and Mary: Economics Games and Experiments
- 4 Bureau of Labor Statistics; Occupational Outlook Handbook, 2010-11 Edition; Economists
- 5 Harvard; Experimental Economics; McKinney & Roth