An extended essay is a daunting task in any subject area. It is good to think that an EE is written not to describe something but rather to solve a problem or to provide an answer to an interesting problem. At least, to attempt an answer. It is this search for an answer that makes the essay an interesting endeavor for you. Otherwise, the exercise is just dull and boring.
Here are some things to keep in mind as you consider doing your EE in economics:
- Select a topic related to your own reality: your town, your mom’s work
- Narrow your topic to a reasonable size: local, not national
Use: How does DVD piracy affect competition between local shops?
Not: What are the effects of DVD piracy on the Chinese economy? - Make sure to have the necessary sources available
- You must use data you have collected yourself [primary data]
- Possess a firm command of the relevant economic theory
- Pose your question in the form of a hypothesis, not a description
Use: Does the introduction of technology into the leather industry in Dharavi worsen unemployment and economic conditions in the surrounding slum areas?
Not: What is the impact of technology on the leather industry in Dharavi, India?
Some recent Micro examples from the IB forum [specific and generic]:
- The effects of the new Bolivia economic policies [liberalization] on the shoe-shining boys’ market in La Paz city.
- How did my uncle’s company survive? [His uncle produced kimonos at very high costs. Yet, it was very successful]
- Efficiency analysis: Centralized Breakfast or Breakfast in each residence? [In his boarding school]
- The Hamburger Market in my Town: A Case of Perfect Competition? [Street sellers of hamburgers in Malaysia]
- Changes in Standards of Living under China’s Transition. Survey using three representative households [Family friends]
- Life in a Sudanese refugee camp. Why is it that refugee household sizes are inversely proportional to household income? [A boy goes back to his refugee camp and collects primary data for his EE]
- The shop in my village. Can it remain a monopoly even when entry is not restricted? [This is a shop in a tiny village in Eritrea and the EE tests the theory of contestable markets]
- What market structure does X operate in?
- Does X achieve allocative and productive efficiency?
- Will the privatization of X lead to increases in allocative and productive efficiency?
- Is the behavior of X consistent with the theory of oligopoly?
- Do the social costs of X outweigh the social benefits?
Some recent Macro/Development examples from the IB forum:
- Does the official Austrian inflation rate truly correspond to the inflation that students in Austria are experiencing? [It is a macro topic, but very nicely brought down to earth by relating it to the cost of living of the students themselves.]
- The liberalization of textile exports and the demise of the MFA (Multifiber Agreement) in India. How have small textile producers in India been affected by this: say, my uncle’s factory or the factory in which my mom works, or the factory round the corner. I suspect that small firms in India will be adversely affected because it would be mainly the large firms that will achieve vast economies of scale, reduce cost, increase exports, lower their prices and drive the small factories out of business.
In order for me to evaluate your idea, I will need the following information:
The research question you intend to pursue: Example: How effective is government intervention on the sale of cigarettes?
How you intend to collect your data: Example: Use sales data from three tobacco shops before and after the implementation of a new tax on cigarettes
The items of economic theory you intend to use: Example: Price Elasticity, Demand And Supply, Cost/Benefit Analysis, Income Effect
The hypothesis you intend to test: Government intervention has not reduced the sale of cigarettes.
Hope that helps. I'm sure EE is going to be a lot of fun
Mr W
