Behavioral Economics in the First-Year Experience

Introduction

Each year more and more institutions of higher education formulate or reformulate programs for entering first-year students which are designed to help those students (typically coming right out of high school) to be successful in the college and university environment. The proliferation of programs is driven by intersecting external and internal forces. The external forces can generally be related to outside scrutiny of the institution’s performance.

The cost of higher education continues to rise at annual rates much higher than the overall rates of inflation. According to the National Center for Economic Statistics in the 10 years between academic year 2007 to 2008 and 2017 to 2018, the inflation-adjusted cost of attendance (including tuition and fees and room and board) at public institutions rose 31% and 23% at private institutions (National Center for Education Statistics, 2020). The level of debt incurred in paying for that education has risen accordingly; according to Forbes, the total student debt in 2020 is $1.56 trillion, making it the second largest consumer debt category, and representing (for members of the Class of 2018) an average of $29,200 per borrower (Friedman, 2020).

In consequence, the pressure to demonstrate that outcomes are being achieved has built both from government and from private stakeholders. Both private and public institutions have seen an increased push to apply metrics such as graduation rates (tied to numbers of years to graduate) and retention rates. The calls come from students, their parents, alumni, and board members. Public institutions, almost by definition, deal with more stakeholders; in addition to the same groups named above, they also face legislators and, by extension, taxpayers. The internal forces also represent a push for scrutiny, but the evaluative language is more about “learning outcomes” and “assessment” thereof.

The 2011 release (in paperback) of Academically Adrift: Limited Learning on College Campuses by sociologists Joseph Arum and Josipa Roska (Arum & Roska, 2011) is just one in a collection of publications by educators questioning how institutions perform in educating students. They pose the very basic question of whether or not students are really learning anything from their higher-education experiences.

Arum and Roska’s study of Collegiate Learning Assessment ¹ data on over 2,000 students (from 24 schools) found “45% of students show no significant improvement in the key measures of critical thinking, complex reasoning and writing by the end of their sophomore years.” (Gorski, 2011)

This adds another dimension to performance.

This study . . . comes as the federal government, reformers and others argue that the U.S. must produce more college graduates to remain competitive globally. But if students aren’t learning much, that calls into question whether boosting graduation rates will provide that edge. (Gorski, 2011)

Background on the Freshman-Year Experience

The focus on the educational experience of students in their first year has its origins at a much earlier time than the pressures described above, or federal mandates to leave no one behind. Most writers credit the work done at the University of South Carolina by John N. Gardner (Gardner et al., 2001; Gardner et al., 2005; Gardner, 2006) to develop the course called “University 101.” The University’s website relates the history as follows:

On a rather warm day in May 1970 on the campus of the University of South Carolina in Columbia, students stormed the administration building and locked President Thomas Jones in his office for hours. But while they were protesting, he was thinking: “Why does it have to be like this?” Jones recognized that the University had failed its students in some fundamental way. Just a little more than two years later, the first group of entering college students signed up for a new course, University 101, and an international movement to improve the educational experiences of first-year college students was born. (http://www.sc.edu/fye/center/history.html)

The University is still a leader in this educational effort; its “University 101” became the National Center for the Study of The Freshman Year Experience (in 1986), and (as its focus broadened) the National Resource Center for The First-Year Experience and Students in Transition (in 1998) (http://www.sc.edu/fye/center/history.html). In October of 2020, the Center hosted its 27th annual conference on the First-Year Experience, and “First-Year Experience” is a service mark of the University.

The mission statement of the Center reads:

The National Resource Center for The First-Year Experience and Students in Transition has as its mission to support and advance efforts to improve student learning and transitions into and through higher education. We achieve this mission by providing opportunities for the exchange of practical, theory-based information and ideas through the convening of conferences, teleconferences, institutes, and workshops; publishing monographs, a peer-reviewed journal, an electronic newsletter, guides, and books; generating and supporting research and scholarship; hosting visiting scholars; and administering a web site and listservs.

(National Resource Center for The First-Year Experience and Students in Transition, n.d.)

The work done by and through the Center has helped other institutions formulate their own approaches to the education of first-year students (Morris & Cutright, 2005).

A Plethora of Programs

It is not surprising that colleges and universities have developed different versions of the freshman or first-year experience particular to their own perceived needs and desired results. (Troxel & Cutright, 2008) In some cases, it is a course, which can be discipline-based or a separate entity (i.e., a course like “Becoming a Master Student”), and for which the format and number of credit hours varies (Dwyer, 1989). Clearly, such a format stresses the academic needs (deficiencies?) of entering freshmen, and other variations might be tutoring or other support services, forming cohorts, and assigning students to a faculty advisor. The overall goal is retention or persistence, ² seen as a function of student success in terms of performance in all classes, choice of a major, and ultimately graduating on time with key skills. ³

The formats established at some institutions place more emphasis on “acculturation,” the meaning of which can range from simply navigating the college/university environment and bureaucracy (i.e., how do I add/drop a class?) to becoming “good citizens” (i.e., active in campus activities; in some environments service activities are emphasized) or at least not “bad citizens” (this means raising issues of alcohol awareness, responsible sexual behavior, etc.). Formats include everything from student orientations (some are only a day long) to residence halls (or floors) designated as “freshmen-only.” The theme of retention (and persistence) winds through these as well, in that the goal is to help students adapt to the new environment (particularly living on campus) and establish bonds with the institution.

By 2017, Steven Mintz argued that the First Year Experience was “ripe for reinvention” arguing that “ . . . for too many freshmen, there is no coordinated, intellectually coherent plan of study—only a hodgepodge of disciplinary-based introductory level courses.” He suggests that the goals of such programs be revisited.

The next sections of this paper will consider the academic and acculturation goals in more detail as well as the suggestions made by Mintz (2017).

The Goals

The first-year or freshman experience is often described as a “foundation” for future success both in subsequent academic work and beyond (Barefoot, 2005; Barefoot et al., 2005). Most formats focus on key skill areas or learning goals, typically writing and oral communications, information literacy, and critical thinking. Some institutions include some kind of service/experiential/engaged learning project, emphasize diversity and/or conflict resolution, or add a global dimension to their experience. Faith-based institutions often have a spirituality component.

An important consideration is the relationship of the first-year or freshman experience to the institution’s core courses, particularly if students must take courses in English composition and speech communications as part of their requirements. While such fundamentals merit the added emphasis, students may find these components of the first-year or freshman course to be redundant and therefore a waste of time (and tuition money).

Information literacy components introduce students to the resources available through the institution’s library system, both the collections and on-line resources. ⁴ Moreover, students may be required to critically evaluate the information they find both in terms of its appropriateness to need and to the credibility (or biases) of its source.

Service learning components can be an important extension of classroom-based learning as they may provide opportunities for students to volunteer and seek to help address community problems. Such activities often are based on team work, and so foster collaborative learning both in peer groups and with faculty and other mentors. ⁵ The “active” and “engaged” dimensions of these activities mean that students are learning by experience and applying theoretical learning in “real-world” settings.

Acculturation goals in most first-year or freshman experience formats include:

Professional staff from areas such as Student Life or Career Planning may be involved in helping to plan class sessions, workshops, or other activities that deal with these topics.

Academic integrity may also be included as one of the goals and can be treated as everything from rules and policies that govern plagiarism to a broader honor code that emphasizes personal integrity and moral values. Consider for example this language from the Office of Student Rights and Responsibilities at the University of Missouri (under the heading “What Is Academic Integrity?”):

Academic integrity is the core set of values and principles that underwrites the very mission of the University itself: integrity, honesty, hard work, and the determination to translate personal and professional principles into behavior. It is a reflection of the students’ experience here at Mizzou and is a measure of the very worth of their degree.

For students, this ethic lies at the heart of the value of their degree. If they or others around them are not living up to a high standard of academic integrity, the worth of the education they are receiving and the degree they will receive is compromised. (University of Missouri, n.d.)

The reinvented goals suggested by Steven Mintz (Mintz, 2017) for the first-year experience represent a plan for “acclimatizing” first-year students to the higher-education environment. For example, in his first goal “Fostering a Sense of Belonging,” it is about providing the opportunity for students to work with a professor and peers, building their skills as a community of learners. His second and third goals emphasize individual contact with faculty and engaging students in the research process.

In his fourth goal, Mintz describes a “meta major” to serve as a “gateway into a cluster of careers” or into “a community of interest.” He notes that

Broader in scope than a departmental major, a meta major helps students identify their area of interest, exposes them to multiple faculty from diverse disciplines, and opens windows into a variety of majors and career options. Since the courses also meet general education requirements, they keep freshmen from accumulating unnecessary credit hours and expedite time to degree. (Mintz, 2017)

However, it is in his fifth goal, “Treating Freshmen as Partners” that Mintz (2017) argues for treating first-year students as “creators of knowledge,” and this is where a first-year experience course based on behavioral economics proves most effective.

Where Behavioral Economics Fits In

Writing in 2010 about college students referred to as Millenials, Sara Konrath (researcher at the Institute for Social Research at the University of Michigan) stated “Many people see the current group of college students ⁶ —sometimes called ‘Generation Me’—as one of the most self-centered, narcissistic, competitive, confident and individualistic in recent history” (University of Michigan, 2010, May 27). In a paper presented at the meetings of the Association for Psychological Science, Konrath and colleagues presented data indicating that college students of this generation demonstrate less empathy than those of previous decades. ⁷ This may be a reflection of a wider trend in our overall society; a 2019 piece in the The Washington Post by Emma Seppälä is titled “Empathy is on the decline in this country. A new book describes what we can do to bring it back” ⁸ (Seppälä, 2019).

The book being referenced is by Jamil Zaki ⁹ (Zaki, 2019) in which he cites Barack Obama’s 2006 statement that the United States suffers from an “empathy deficit” and argues that since then the situation has only worsened. Zaki discusses his research, including his own experiments, and contends that empathy is a skill and as such it can be improved with practice. The study of Behavioral Economics provides opportunities for such practice, for opportunities to understand people who are not like us and in particular, to understand how they make choices that are not in their own best interests.

In The Republic, Plato argued that empathy is “the highest form of knowledge . . . for it requires us to suspend our egos and live in another’s world.” “Traditional” Economics describes the actions of “homo economicus” or “economic man” who seeks to maximize the satisfaction or utility being gained through spending. Such an actor is assumed in many models in Economics, often also being endowed with perfect information. Behavioral economics argues that not all decisions follow the process of calculation and weighing of pros and cons described above, adding understanding gained from the study of Psychology. Humans are emotional and subject to distractions; moreover, there are cultural and social factors that affect decision-making. Behavioral Economics allows for people to be “irrational,” specifically to experience cognitive biases. For example, suppose an individual is offered a choice between (a) a free gift card with a value of $10 or (b) a gift card that costs $5 but has a value of $20. The rational choice would be to select choice 2 as it has the high net value, but as argued by Shampanier et al. (Shampanier et al., 2007), “zero” is a “special price.” One of Shampanier’s coauthors, Dan Ariely, calls this “the power of free” (Ariely, 2010). This is one of a number of cognitive biases that have been identified by behavioral economists. ¹⁰

The roots of behavioral economics are many and varied. Writing in the Harvard Business Review, Justin Fox (Fox, 2015) does a masterful job of untangling these, beginning with the rise of applied probabilities in World War II strategy (von Neumann & Morgenstern, 1944) so that decisions could be seen in the context of game theory. But, it can be argued, this replaced the “utility” in the standard economic model with “expected utility” and still assumed that people could do the calculations (Kahneman et al., 1982).

It was Ward Edwards’ work, consisting of two seminal articles in a psychology journal (Edwards, 1954, 1961) that first formulated the issues in people behaving as the rational-behavior model predicts and then tested to examine how people act when faced with having to make choices. Edwards also contended that decisions can be improved if people were given tools and training; basically, these would help to raise their self-awareness.

This practice of experimentation was continued by Daniel Kahneman and Amos Tversky, in collaborations that began in 1969 and culminated in a Nobel Prize for Kahneman (Tversky being deceased by then) and the publication of Thinking, Fast and Slow (Kahneman, 2011), considered one of the leading works in the discipline. The approach to decision-making that recognizes that people use heuristics (short cuts that are a practical approach to making decisions, though the results might not be rational) and are affected by biases is predominant in the discipline today.

A First-Year Course Based on Behavioral Economics

Behavioral Economics provides rich opportunities for teaching students in a first-year experience, particularly as work in the discipline explores decision-making directly related to acculturation goals such as time management, financial management, and academic integrity. The experiments that can be done in the discipline make Mintz’s fifth goal, facilitate treating first-year students as “creators of knowledge.” With regard to empathy, it can be a powerful lesson for first-year students to find out that their confidence in their own thinking may be misplaced, perhaps as a result of their own particular context. In the example cited earlier about the gift cards, it can be pointed out that a person might not have the $5 to spend.

There are a number of ways to approach such a course. Behavioral economics.com provides an annual guide (edited by Alain Samson, n.d.) which is a leading annual publication which includes contributions from noted scholars in the discipline and which is free to download.

There are several “Introduction to Behavioral Economics” textbooks, and typical of textbooks, they survey various writers and their work and provide an integrated view of how the field has progressed.

One could also, of course, build a syllabus around notable works in the field, with a reading list that would include (among others): Thinking, Fast and Slow by Daniel Kahneman; Nudge: Improving Decisions about Health, Wealth and Happiness by Richard Thaler and Cass Sunstein; Blink, The Power of Thinking Without Thinking by Malcolm Gladwell; Freakonomics by Steven Levitt and Stephan Dubner; Stumbling on Happiness by Daniel Gilbert. A quick Google search for “best books in Behavioral Economics” provides a number of lists most of which overlap.

Daniel Ariely’s Predictably Irrational (Ariely, 2010) appears on almost all of these lists. Ariely is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight. (The center focuses on applications of the findings in the discipline.)

In developing a course for a discipline-based first-year experience, I looked for approachable materials on behavioral economics. The first-year experience course I wished to design had both academic and acculturation goals, and this subject matter seemed to lend itself to providing a framework in which both could be integrated. From the various possibilities noted above, I decided to build the course around Daniel Ariely’s Predictably Irrational (Ariely, 2010). I sought to have a foundation text at a general readership level, but which provides citations of articles published in scholarly journals. ¹¹

The table of contents of the book accommodated the acculturation goals I wanted students to consider; the chapter titles show this:

The book proved a perfect fit for a number of acculturation goals. For example, Ariely’s chapter on “The Problem of Procrastination and Self-Control” was the context for the discussion of time management. “The Influence of Arousal” led to class discussions about responsible choices in sexual relationships. Two chapters on “The Context of Our Character” allowed for considerations of honesty/dishonesty and the academic honor code. ¹² In terms of financial management, students were able to draw connections to pricing patterns they had observed and the “power of free” was readily apparent in any number of advertising efforts.

Moreover, the presentation of the material seemed appropriate for first-year students. Ariely explains the material in a way that most college freshman can understand; second, he illustrates his points with experiments conducted on and by college students. Perhaps most importantly, he uses his personal narrative to inform the material and students seem to respond to the warmth and humor that comes through the writing. ¹³ Storytelling is an effective teaching tool. (See Green et al. [2002] and others.)

In terms of academic goals, the topics mentioned in the book provided a number of ideas for student writing projects and presentations. Having been introduced to a topic, students can then be assigned to find the articles from peer-reviewed journals referenced in the chapter bibliographies. This provides an opportunity to discuss differences in writing for different audiences, discuss the construction of a literature review, and to help students learn about citations of work by previous authors.

Perhaps most importantly, Ariely’s book gives examples of experiments that could be easily replicated on campus. Economists have long realized the value of experiments as a teaching tool (Holt, 1999). The experiments require little in the way of equipment, and so were not costly, and were not of the type likely to require the review of an Institutional Review Board (though it is always worth checking; a good source for federal guidelines can be found on the website of the Food and Drug Administration, and individual institutions typically have their own policy documents.)

For example, having read about some of Ariely’s results of experiments with bowls of candies of different types (to see which type was chosen first, etc.), students could work in groups to plan their own versions, complete with thesis statements and action steps. After the experiment was complete, students could review their results and assess the strengths and weaknesses of their experiment designs. These are opportunities for experiential and collaborative team work that can result in interesting surprises for students and as such teachable moments.

Assessing Outcomes Absolutely and Relatively

Ideally, one would like to assess the degree to which goals in a first-year or freshman experience are achieved by students as a group and as individuals. There are no satisfactory metrics by which this can be accomplished, largely due to the number of factors involved. Having a section (or some sections) using behavioral economics (as opposed to other topics in other disciplines) might suggest a natural experiment whereby the achievement of goals might be assessed relatively. However, if students are given a choice of topic then the problem of self-selection bias also arises.

At this juncture, the only available data are student evaluations by which freshmen can indicate the value of the course. However, many colleges and universities make use of student satisfaction survey instruments administered to students beyond the first year. It could be useful to track the results for students who have taken the first-year experience course described in this article to see if there are any notable differences in results. It should be noted, though, that such an instrument would be administered to students who have persisted and that might also be worth assessing relative to other first-year experience courses.

The First-Year Experience in the Fall of 2020

Colleges and universities are struggling with decisions about resuming classes in the Fall of 2020. Many have chosen to move to an online form of delivery, or perhaps a hybrid. It is worth noting that the course described in this piece would work very well in these formats. The topics are very inviting for student discussion and in a synchronous online session the “poll” format in various learning management systems could be used to spark the conversation.

There are many excellent videos, some by Dan Ariely himself, on the topics covered in the suggested course text. They provide for rich content delivery in a synchronous and asynchronous environment. Other materials are readily available, notably The Behavioral Economics Guide made available as a free download by BehavioralEconomics.com.

Conclusion

Most colleges and universities are implementing or revising their first-year or freshman experience programs, but “the efforts that are being made are not always being done in an organized and coordinated manner” (Kelly, 2014). For programs with an academic base, a topic such as behavioral economics provides a natural framework for achieving academic goals and integrating acculturation goals.