Economics 201

Group Research Projects


The final homework assignment of the semester gives student groups the opportunity to do some basic, "hands-on" economic research on a question of local interest. We will form groups of 2-5 students to work on projects; I will assign groups based on interest, or if you have classmates with whom you'd like to work you may request to work on a group together. It is expected that each member of the group will contribute in an important way to the project—free riding is not allowed!

You may either choose a project from the list of suggestions below or you may propose one of your own creation. I have prepared a Moodle questionnaire at which you should enter your preferences (by Wednesday, November 16) about topics and the names of any classmate with whom you'd like to work. I will make every effort to organize groups in a way that matches your preferences for groups and partners, but it is unlikely that everyone will get his or her first choices of both.

The result of your project will be presented by one or more group members on the last day of classes, Wednesday, December 7. You must also turn in a short report summarizing your research methods and findings at that time.

Since you are all new to the process of economic research, it may be somewhat difficult for you to formulate your thoughts into a "testable hypothesis" and then to recognize what regimen of data collection and analysis would test it. You are encouraged to formulate a tentative research plan, then to confer with the instructor in person or by email before you get too far into the research.

Your presentation should begin by posing the question(s) that your research was intended to answer. You should then describe the data you collected, how these data were analyzed, and how you drew your conclusions. Presentations may use computer projection (Powerpoint?) and will be 8 minutes in length, plus some time for questions.

Suggested Topics

All of the topics below have been successfully used by groups of students in previous semesters. You may choose to work on one of these as it stands, modify it (subject to instructor approval), or propose a new research topic of your own. Only one group may work on a particular topic.

1. Textbook pricing. Reed students have increasingly flexible online options in purchasing textbooks for class. How does the Reed Bookstore decide on the prices of textbooks, both new and used? Where does it get used textbooks and how much, if any, money does it make on them? How does it decide how much to pay to students who resell their textbooks at the end of the year? How do these prices compare to off-campus alternatives? Is it possible to "rent" textbooks and is this an option that would be appealing to Reed students?

2. Bookstore merchandise pricing. Homer's Hut and the Reed Bookstore seem to have considerable monopoly power in selling to Reed students. Choose a small selection of commonly purchased goods (a few office supplies and/or food items) available there and compare their prices to those available from nearby off-campus vendors. Be sure to include some "impulse purchase" items as well as some that are more expensive and would justify fairly careful consideration before buying. What do you find? Does Homer's or the bookstore seem to be using its monopoly power to charge monopoly prices? Are there differences between pricing policies on different kinds of goods? How do you explain your results?

3. Coffee. There are many places to buy coffee on or near the Reed campus. Your research task is to figure out what determines the prices charged by various coffee sources. You should pick two or three basic coffee varieties (latte, cappuccino, etc.) and collect price information from a variety of coffee shops within a couple of miles of Reed. Be sure also to collect information about the size of the serving. How is the price per ounce related to whether the shop is a chain or independent, the location of the shop, the presence or absence of seating for on-site consumption, the selection of other menu items available, hours of operation and other factors that you think might matter?

4. Airline prices. Collect information on the mileage flown, number of daily flights (on weekdays), the range of prices of coach class tickets, and the number of airlines which provide service on flights between Portland and a selection of cities around the country. Compare your findings across destinations. To what extent do ticket prices reflect differences in the costs of operating the flights? Do you see any patterns in fares according to whether the destination is large or small, close or distant, served by many airlines or a few, etc.?

5. Organic produce. Many grocery stores and produce stands offer a choice of "regular" or "organic" produce. Your task is to sample the vegetable outlets within a few miles of the Reed campus and compare the selection, prices, and apparent quality of organic vs. regular produce. How does each store define "organic"? Are the definitions consistent? How much more does organic produce cost? Are there differences in the relative prices among stores? Are there factors that could explain these differences? Are large supermarkets more or less expensive than small stands or specialty stores?

6. Club card discounts. Many items at Safeway are cheaper if you use your "Club Card" when you purchase them. How much does someone save by using the Club Card for a typical market basket? What kinds of goods are typically offered at a discount with the card and what kinds are not? Why? Compare Safeway's prices on a selection of items to those of Fred Meyer, which has no similar card program. Are the goods that are offered at a discount with the card priced higher than at Fred Meyer to begin with? What does Safeway hope to gain from the card program?

7. Pizza. Pizza is a most popular food among college students. Reed students have many choices, some cheap and some more expensive. Many of the pizza vendors in Southeast Portland deliver to Reed for free. Your task is to investigate the market for pizzas faced by a Reed student. How much do prices vary? Are there observable variations in characteristics of the product that explain this price variation (perhaps delivery, waiting time for delivery of pizza, size, amount of cheese and other toppings used, real vs. artificial cheese, "quality" however you measure it)? How do Reed students respond to this variation?

8. Interest rates. In a perfectly competitive market, there is a uniform price for a homogeneous good. Retail provision of financial services are often highly homogeneous, so we might predict that prices should be the same across all sellers. Compare the interest rates on accounts with comparable terms across a set of banks and credit unions in Portland and some in your home towns, and perhaps including some "online only" banking institutions. (You should be able to get this information online, or perhaps with a phone call.) Compare both a few classes of deposits such as savings accounts, money-market accounts, and time deposits (certificates of deposit) and a few classes of loans (mortgage or auto, for example). Is there any variation? If so, is there a detectable pattern across locations and/or institution characteristics?

9. Tax losses on the Reed campus. The City of Portland, Multnomah County, and Portland Public Schools (among other tax entities) do not collect any property tax on the Reed campus. How much are they losing? How much would the Reed campus be worth if developed as residential real estate? You can find the estimated market value of various existing houses on Web sites such as Zillow. You will have to estimate the market value of the houses that would likely be built on the property if Reed disappeared and the land were privately owned. You should assume that the houses to be built are all single-family and high-quality. Some would have amenities such as a lake/canyon view. Once you have estimated the value of the houses, find the prevailing tax rates to figure out how much tax would be assessed on those values.

10. Cell-phone plans.  Compare the pricing characteristics of a set of alternative cell-phone plans with different companies and at least a couple of choices of hardware. I would suggest starting with a basic plan in mind (amount of data, for example) and then adapting the plan as necessary or appropriate for the offers of different vendors. Do there seem to be bargains out there or do price differences basically reflect differences in the characteristics of the plans?

11. Analyze a retail product.  I've suggested studies of coffee, textbooks, other bookstore merchandise, cell-phone plans, and airfares above. But you could choose another common retail product that is available locally and/or online and investigate differences in price and, if appropriate, product quality across different vendors and brands.