In the red: A majority of high school students don’t understand basic economics

Aug. 2, 2005 by Jeany Llorente and Julie M. Hughes NMSU News Center

Earlier this year, 2,242 students in grades 9-12 took an economics survey in the form of a quiz. The result: Six in 10 high school students did not make the grade.

On average, the students scored a 53 (F), reported Harris Interactive Inc., which conducted “The Standards in Economics Survey” on behalf of the National Council on Economic Education (NCEE).

The national survey covered concepts such as scarcity, allocation of goods and services, role of competition, role of money, and specialization and trade.

The findings don’t surprise Benjamin N. Matta, a New Mexico State University economist. He said high school students’ exposure to economics is limited. Matta first realized this when his own children received homework assignments and textbooks that were supposed to be teaching economics. “Well, they were not,” he said.

“I began to survey my own freshmen students and asked them about their experience (with economics),” Matta said. “For a lot of them, the extent of their knowledge of economics and personal finance was that they knew there was a stock market.”

But to get to the students, you first have to get to the teachers.

Hoping to bridge the gap between what students need to know about economics and what they are being taught in school, NMSU’s College of Business created the Center for Economics and Personal Finance Education (CEPFE).

The only such program in the state, CEPFE conducts workshops where high school teachers receive new ideas on how to teach economics and personal finance to their students. Participants are given a review of economic concepts, and receive a stipend and several materials. In addition, the college will supply year-round support to participants.

The College of Business received funding from the State Legislature to develop these workshops through CEPFE, which was awarded a three-year affiliation with the NCEE in May 2005.

“It’s been a great refresher, and I think it’s wonderful that the business college has come up with this (program),” said Hanna Phillips, a social studies teacher from Mayfield High School in Las Cruces. “As a high school teacher, one of my main goals is to prepare students for college so I think it’s great that they are opening up the lines of communication in order to provide us with (material) so we can better prepare kids.”

Harry Hellmuth, an advanced-placement European history teacher at Oñate High School in Las Cruces, said the key to the workshops he attended was Michael Ellis’ emphasis on presenting economic concepts in a way that is more relevant to the age of his students.

“He presented a lot of economic theory in regard to NASCAR racing,” Hellmuth said. “Economics can be pretty abstract, very heavy stuff, but Dr. Ellis has the most interesting way of presenting these dry theories.”

Ellis, head of the economics and international business department at NMSU, was one of three faculty members who taught the first week of the three-week program in July. Other workshop professors include Ken Martin, a professor of finance, and Randy McFerrin, an assistant professor of economics.

Matta, director of CEPFE, said the program serves as a resource for high school teachers who are inundated not only with daily work but also with federal requirements such as the No Child Left Behind Act.

“It makes their job a little more difficult and what we have to do is find ways to accommodate those requirements,” he said. “One way to help teachers is to advise them on how to integrate economics in areas that are being tested like math and writing. This way we serve both goals – helping students prepare for the test as well as achieve economic literacy.”

For the future, CEPFE plans to include workshops for primary and middle school grades, provide literacy programs for adult populations, partner with local financial institutions and with the economic education program of the Federal Reserve Bank of Dallas. The center also intends to have workshops for school districts in the northern part of the state.

“In the end, I hope New Mexico kids have a stronger knowledge of economics and personal finance so they can make better decisions,” Matta said. “If in four or five years test scores are up in those two areas, I will be very happy.”

The quiz also revealed the following:
•Fewer women than men show a good understanding of economics.
•Black and Hispanic participants are less likely than their Anglo counterparts to get an “A” or “B.”
•On average, adults received a grade of 70 (C) for their knowledge of economics.

For more information on CEPFE, contact Matta at (505) 646-4085 or

In addition to CEPFE, Matta also has worked with NMSU’s College of Education to revise its business education curriculum for current teacher candidates who want to teach business in the future.

“Although the state of New Mexico has not modified its business teaching endorsement since the mid 1980s, the college decided that it was time to take the curriculum from more of a vocational focus to a professional one,” said Michael Morehead, associate dean in the College of Education. “All other secondary endorsements have been modified more recently so the college worked with Dr. Matta and the College of Business to update the program to meet the needs of today’s business teacher candidates.”

Morehead said the new program allows future teachers to understand the most up-to-date business models.

“High school teachers have the ability to enhance the preparedness of students moving into business programs at universities. In the past they have been seen as preparing students for clerical positions, but that has changed and we need to change how we are preparing our business teachers,” Morehead said. “Because of Dr. Matta’s work we have really been able to create a spirit of collaboration between the colleges of business and education.”

Teacher candidates who pursue the new business education curriculum designed by Matta will now meet all of the requirements needed to later pursue an MBA in the College of Business.

“The new curriculum opens a lot of doors for our students,” Morehead said.

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