Economics 201

Optional: Group Research Projects


This optional assignment gives student groups the opportunity to do some basic, "hands-on" economic research on a question of local interest. It is not required. You may form a group of 2-5 students to work on the project. It is expected that each member of the group will contribute in an important way to the project—free riding is not allowed! Members contributing to the group will receive "extra credit" equivalent to one homework assignment. (If you'd like to do a project but don't have a group to work with, let me know and I'll see if I can match you up with a group that would like more members.)

If you decide to undertake a project, you may either choose a project from the list of suggestions below or you may propose one of your own creation. An alternative is to prepare a ten-minute skit demonstrating some aspect of economic analysis that we have studied this semester. If you propose a project topic or skit, it must be approved by the instructor no later than Monday, November 22.

As soon as you have formed your group, let me know by email who is in the group and what topic you would like to research.

The result of your project must be presented by one or more group members at the Thursday, December 2 evening activity session. You must also turn in a short report summarizing your research methods and findings (or a script for your skit) by Wednesday, December 1.

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 10 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; they will be allocated on a first-come, first-served basis.

1. 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. 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. 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. 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. 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. Unleaded gasoline is a somewhat homogeneous commodity. However, there may be variations in the quality of gas sold under different brand names and there are surely differences in the convenience of various locations. Collect information on the pump price of regular unleaded gasoline at 10 or more stations in Southeast Portland. Although gas prices are available on the Internet, you should visit the location to determine the actual characteristics of the station. For each station, note the location, proximity to heavily traveled roads, brand name, presence or absence of auxiliary services such as a convenience store or service garage, and any other relevant characteristics. How much variation do you find in prices? Is brand name correlated with price? What role does location play, if any? How else might you explain price variation?

7. 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?

8. 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?

9. 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. (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?