Using The Simpsons to teach economics—how's that for a pedagogical tool?
Economics is not an easy subject to learn. Students find it difficult for a variety of reasons. Some have an outright aversion to the numbers and graphs that are typically at the core of an economics curriculum; others—used to relying on introspection—find applying economics properly to be difficult when they would not make the same decision given the same incentives.
So how can economics professors make this area of study more intuitive for students? Here’s my pedagogical standby: I started using popular culture like The Simpsons to teach economics. I’ve found that students find it easier to apply economics to fictional characters they know well, especially when it involves preferences different than their own. For example, I doubt any of my students would try to gain excessive weight in order to qualify for disability and work from home as Homer does in “King-Size Homer.” Yet they almost all could understand that it made sense to Homer, given his own lethargic preferences and the incentives he faced.
In editing Homer Economicus: The Simpsons and Economics, my goal was to take this insight from my classes and reach a larger audience interested in learning economics. I contacted dozens of other economic instructors who I knew also used The Simpsons in the classroom and asked them to write up short essays on ideas and concepts that would be found in any basic economics course. In addition, there are chapters applying economics to health care, casinos, prohibition, and immigration.
Basically, the book is filled with examples from the show that illustrate economic concepts and the economic way of thinking. What follows are four examples of how The Simpsons might have been teaching you economics while making you laugh.
Money is a Medium of Exchange
A medium of exchange is anything that can be used to pay for goods or services. People often prefer to use a medium of exchange, such as money, in order to avoid the hassle and difficulty of bartering. As I tell my students, it would be hard for their parents to pay me for my class by giving me something that they produce, like legal services or 3rd grade teaching.
Homer Simpsons reminds us of this basic point about one reason why money is valuable in “Boy-Scoutz ’n the Hood.” In that episode, Homer is sitting on the couch eating peanuts. As he comes to the end of the jar, he tosses the last peanut towards his mouth, only to miss his mouth and have the peanut disappear. Desperately wanting the final peanut because it is “overflowing with the oil and salt of its departed brothers,” Homer frantically searches for the peanut under the couch, only to find a $20 bill.
Instead of being excited, Homer is disappointed, saying “Aw, $20? I wanted a peanut!” His brain, however, reminds him that “$20 can buy many peanuts,” to which Homer responds by asking for further explanation. Only after his brain reminds him that “money can be exchanged for goods and services” does he let out a “Woohoo!”
Losses Tell Us To Stop Wasting Resources
In a market economy, losses serve a very important function, namely of making clear to producers when they are wasting resources. If an entrepreneur goes out and purchases $10 of raw materials to produce a product that consumers will only buy for $7, then she has made herself and society worse off by $3. Idealistic and enthusiastic entrepreneurs have a tendency to throw good money behind bad schemes in an attempt to convince consumers of the value of their product, and mounting losses are often necessary to get them to change course.
Homer Simpson’s brief foray into the grease business in 1998’s “Lard of the Dance” illustrates the importance of losses in a market economy. After realizing that he can make money by selling grease, Homer and Bart fry up $27 worth of bacon in order to harvest four pounds of grease. They take their product to the grease buyer, who pays them meager 63 cents for the grease! After absorbing a 97% loss on his initial investment, Homer stops this particular resource-wasting scheme and takes up another (as usual).
The Value of A Good is Subjective
One of the hardest things to get students to understand is that thinking like an economist means taking people’s preferences as given. Aesthetically, an economist might feel that a Big Mouth Billy Bass is worthless. If her goal is to understand what is going on in the marketplace, however, she has to set her personal feelings aside and recognize that different people value goods and services differently. This means that they will respond to changes in prices and incentives in very different ways.
A nice illustration of the value being subjective can be found in The Simpsons episode “Bart The Fink.” The story begins with every member of the Simpsons family receives $100 from the estate of their great aunt Hortense. Every member of the family wants to do something different with their money. For example, Bart wants to spend his $100 on 100 tacos, while Lisa wants to donate $100 to the Corporation for Public Broadcasting, to which Marge responds (clearly not as an economist but as a mother) “Tacos? Public Broadcasting? I won’t have you kids throwing your money away like that.”
Scarcity Forces Us To Choose among Competing Ends
The fact that scarcity implies choice is a fundamental economic idea. One economics textbook starts off the introduction to the discipline by saying that “economics is about scarcity and the choices we have to make because our desire for goods and services is far greater than their availability from nature.” Even the consummate capitalist of the show, Mr. Burns, has to make choices how to allocate his scarce time among different activities that he wants to do, such as releasing the hounds or getting Don Mattingly to shave his sideburns.
Every decision made by Homer over the 25 seasons of the show illustrates how scarcity necessitates choice. As far back as the fourth episode of the first season of The Simpsons, we see Homer having to make a difficult choice between important ends. In “There’s No Disgrace Like Home,” Homer wants to take the family to therapy after an embarrassing day at the company picnic. However, a visit to Dr. Marvin Monroe’s office costs $250, which he can only get by pawning the family television set. Given his resources, Homer could not have both family counseling and television (“teacher, mother, secret lover”) and so he had to choose.
The Simpsons is a veritable fount of economic insights, as well as humor. The show’s pride of place as one of our most widely viewed and beloved animated series makes it an excellent reference point for students and complements abstract principles with memorable—if improbable—examples.
Joshua C. Hall is an Associate Professor of Economics in the College of Business and Economics at West Virginia University. He is editor of Homer Economicus: The Simpsons and Economics and a co-author of the widely-cited Economic Freedom of the World annual report.
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