Teaching with Case Studies

1. Introduction

‘Knowledge is the beginning of practice; doing is the completion of knowing. Men of the present, however, make knowledge and action two different things and go not forth to practice, because they hold that one must first have knowledge before one is able to practise. Each one says, ‘I proceed to investigate and discuss knowledge; I wait until knowledge is perfect and then go forth to practise it.’ Those who to the very end of life fail to practise also fail to understand. This is not a small error, nor one that came in a day. By saying that knowledge and practice are a unit, I am herewith offering a remedy for the disease.’ Wang Yang-ming, Chinese philosopher, 1472–1529

The main aim of economics education is to enable students to ‘think like economists’. According to recent research, thinking like an economist includes not only analytical or problem-solving skills but also creative skills, which ‘help determine how to frame questions, what tools and principles apply to particular problems, what data and information are pertinent to those problems, and how to understand or explain surprising and unexpected results’ (Siegfried et al., 1991, p. 199). A large body of evidence (see, for example, Brown et al., 1989; Boehrer, 1990) shows that an effective way to accomplish this learning is to provide students with increased opportunities to become more actively engaged in the application of economics. However, much of the teaching in many higher education institutions takes the traditional form of lectures and seminars supplemented by problem sets, written assignments and limited class discussions. As recently pointed out by Becker and Watts (2001), the predominant teaching method in economics departments in the United States is still what they refer to as ‘Chalk and Talk’.

As lecturers, we would generally agree that the most vivid and powerful lessons from our own educational experiences are related to projects in which we were actively involved. Concepts, ideas and experiences are harnessed and clarified in our mind more easily and quickly through direct experience than through the reading of books and abstract theories and concepts. This is particularly true in the early development of cognitive skills.

The use of the case method in the teaching of economics has received greater attention in recent years. Velenchik (1995) discusses her experience in using the method to teach international trade policy. She provides an evaluation of the method by comparing the results of students exposed to case discussion with the results of students on the same course but who have instead been taught in more traditional ways. She observed that the students on the case course had a more complete grasp of theory and did better in examination questions requiring analysis of real-world situations using theory. She also observed a dramatic improvement in students’ analytical thinking and in their ability to express themselves verbally.

Carlson and Schodt (1995) discuss their experience of using the case method in teaching development economics and international monetary economics. They present a detailed account of students’ evaluation of the case method and they are able to show that students are emphatically positive and convinced that the use of cases helped them to learn economics. According to their findings, students feel that the use of cases adds interest to the study of economics and makes their classroom much more real. Carlson (1999) explains how students on his statistics course are presented with a situation that requires statistical and economic analysis to solve a realistic problem. Cases with data for real applications are supplied to students who are then required to prepare a written report to a policy decision-maker. The author’s evaluation of the case method shows that the students’ involvement in problem solving has greatly improved their learning of statistical methods.

Traditional lectures and seminars are still valuable for transmitting information and knowledge. However, to help our students learn to ‘think like economists’ we need to consider seriously ways of moving beyond this more traditional mode of instruction. Some of the innovative and more active suggested forms of teaching and learning include the use of classroom games simulations, the introduction of experimental economics, the use of popular and business press, the use of case studies and co-operative learning. In this chapter we will focus on how case studies can be used in economics teaching. The remainder of this introduction explains the basic philosophy of the case method of teaching, its pedagogical value and the different approaches to the use of case studies.

1.1 The case method

The case method was born out of research, teaching and consultancy activities at Harvard Business School. Over the years, case programmes have been established at both Harvard Business School and the Kennedy School of Government. The experience accumulated by tutors and teachers is shared through the publication of short papers that discuss the various pedagogical approaches to case method teaching (see, for example, Boehrer, 1995; Shapiro, 1994). The classical case method has three main components: the case itself, the students’ preparation for the case, and the discussion that takes place in the classroom.

Cases are stories about situations in which individuals or groups must make a decision or solve a problem. Cases supply students with information, but not analysis. Although many cases are drawn from real events in which decisions have been made and the outcome is known, most do not describe the decision itself, leaving students with the task of determining what the correct course of action would be. Case method teaching is a form of discussion teaching in which students prepare a case, either individually or in groups, and then seek collectively through in-class discussion to discover a solution to the problem presented by the case.

Unlike problem sets, cases do not set the problem out in clear steps; nor do they lead to a single correct answer. Unlike examples used in lectures, textbooks or scholarly articles used for discussions, cases contain facts and description but no analysis. The story in the case can be told in narrative form, with numerical data, charts or graphs, with maps or other illustrations, or with a combination of all these techniques.

Newspapers and magazine articles, insofar as they chronicle events without presenting analysis, can effectively be used as cases. This is true even for articles describing a policy decision or an action that has already been made, as long as they do not provide an analysis of the decision-making process itself. Cases can often be composed of a number of newspaper articles, particularly if they present different points of views about a single issue. For the inexperienced lecturer, approaching case method for the first time, newspaper articles (or newsclips) on a particular case can be effectively used as the first step towards the gradual development of an in-depth and comprehensive account of the case. This ‘progressive’ approach to the use of case studies will be discussed in more detail later in the chapter.

The success of the case study method is critically dependent upon student preparation. Students must come to class well versed in the facts of the case and prepared to provide an analysis of these facts. In the early stages of a module, it is usually helpful to provide students with study questions to guide their preparation, including questions aimed at focusing attention and questions that help them to begin the analytical process. These questions generally ask students to think about the relationships between the facts and events described in the case.

The in-class discussion, the core of case method teaching, is flexible enough to accommodate a variety of different strategies for involving students. Role playing, for example, heightens the identification of students with actors in the case. Students may be organised into groups as a means of building consensus or of sharpening conflict. Students might prepare the case within a group or form groups more spontaneously during the course of discussion. Individual or group presentations can be the starting point of the discussion.

1.2 The pedagogy of case studies

The case method is based on a philosophy of professional education which associates knowledge directly with action (Boehrer, 1995). This philosophy rejects the doctrine that students should first learn passively, and then, having learned, should apply knowledge. Instead, the case method is based on the principle that real education consists of the cumulative and unending acquisition, combination and reordering of learning experiences.

There are two fundamental principles underpinning the case method. First, the best-learned lessons are the ones that students teach themselves, through their own struggles. Second, many of the most useful kinds of understanding and judgement cannot be taught but must be learned through practical experience. When instructors assign problems or papers in a course, they are motivated by a similar concern: by working through the problem set on their own or writing the paper, students reach a deeper understanding of the concepts and ideas than they would have if they only read the text or listened passively to lectures. Case method teaching extends this principle to make preparing for class and the class session itself an active learning experience for students. By using complex real-world problems as the focus, it challenges students to learn skills that will be appropriate to deal with the practical problems that they will face as economists, civil servants or private managers.

Teaching through the case method allows educators to address specific pedagogical issues and to develop higher-order skills in students. Velenchik (1995) highlights four pedagogical issues addressed by the case method:

• Motivation to learn theory. In general, undergraduate economics courses tend to treat applications as secondary to the exposition of theory. In our teaching we often use examples to illustrate the application of particular theoretical concepts. However, we tend to use the example to reinforce the theory, having taught the theory first, rather than thinking of the theory as a set of tools for answering the question posed by the application. The focus, therefore, is on the theory itself, and the application is often perceived as incidental. When students do not understand the purpose of theory, the process of learning becomes more dry and difficult than it needs to be, and they often fail to grasp the tools they need. In the case method, the problem that the students are challenged to solve takes centre stage. They soon realise that they do not have the tools and they start looking for the tools. They want to learn theory.
• Application of theory. The ultimate goal of economics education is to enable students to apply economic reasoning to particular policy issues. The focus is generally as much on the process of policy analysis as on the specific area of policy. One method for illustrating the process is through examples related to lectures. However, this is problematic. The example is often preceded by theory, so that students think of the application as a use of the theory, rather than seeing the theory as a tool for dealing with the issues raised by the application. Examples are commonly selected because they are good illustrations of particular theoretical concepts, but they do little to help students learn which theories are appropriate for which kinds of policy problem. On the other hand, the case method requires the student to identify the theory that best addresses the economic problem under investigation.
• Use of evidence. Empirical analysis, guided by theoretical concepts and analytical tools, is central to many economics modules. Students are often required to develop an ability to use quantitative evidence. This often involves a number of tasks, including determining what types of evidence are relevant measures of particular phenomena, evaluating the credibility of available information, performing calculations to arrive at appropriate and useful measures, and finding the best way to convey this information using tables and graphs. In this respect, although the lecture and example method usually provides students with some exposure to quantitative information, it does not require them to do the work themselves. A prepared classroom example does not provide training in how to select, manipulate and present such evidence; nor does it help students learn to interpret evidence themselves. Case studies include raw data that students have to manipulate, represent and comment on in order to solve the problem.
• Limitation of theory. One of the most difficult aspects of applying economic analysis is understanding which parts of a question can be answered by economic analysis, and which are best addressed using other disciplines. In particular, students need to learn the difference between identifying economic consequences of a policy choice and considering these decisions in the broader social and political context in which policy-makers and business leaders find themselves. It is difficult to use a lecture and example to fulfil these goals, since classroom examples are often abstracted from their context. The case method forces students to be confronted with the broader (non-economic) consequences of economic decisions.

The case method can also be used in a very effective way in order to move students gradually up the cognitive skills ladder from the low skills levels of knowledge, comprehension and application to the higher and more desirable skills of analysis, synthesis and evaluation. This educational taxonomy was originally proposed by Bloom (1956) and, even if not uncontested, it provides a transparent and structured approach to the development of students’ skills. The following list describes this educational taxonomy and then explains how the case method helps in developing each of the skills.

• Knowledge. This refers to the student’s ability to remember previously learned information. It involves the recall of a wide range of material but all that is required is bringing appropriate information to mind, not necessarily understanding its meaning. The case method is probably not the most efficient way to convey knowledge. However, in combination with some lectures, it can be used to broaden knowledge.
• Comprehension. This skill is defined as the ability to grasp the meaning of material and it can be demonstrated by translating material from one form to another, by interpreting material and by extrapolating information. By basing knowledge within a real-world context, the case method supports and facilitates the comprehension of basic knowledge.
• Application. This is the ability to use learned material in new and concrete situations. It may include the application of rules, methods, concepts, principles, law and theories. Through the analysis of policy decisions or business strategies, students develop an understanding of how theory is applied in real-world contexts.
• Analysis. This identifies the ability to break down material into its component parts so that its organisational structure may be understood. The process generally includes identification of the parts, analysis of the relationships among the parts and recognition of the organisational principles involved. As already mentioned, analysis is at the centre of the case method. The case studies require students to break down complex information, establish relationships and identify issues.
• Synthesis. This skill refers to the ability to put parts together to form a new whole. The process may involve, for example, the production of a unique communication (presentation) or a plan of operations (research proposal). Case studies foster this skill by requiring students to identify relevant information, summarise fundamental concepts and present a concise summary of main events.
• Evaluation. Critical evaluation is concerned with the ability to judge the value of material for a given purpose. After having analysed and synthesised a particular case, students are required to engage in an evaluation of alternative policies or strategies available to policy-makers or business leaders. This can include an evaluation of decisions already taken against possible alternative solutions.

The case method is a rich and powerful approach to the development of cognitive skills in students. It is also a flexible approach, in the sense that lecturers can use it in alternative ways. These are discussed in the next section.

1.3 Adopting the case method

There is no single approach to case teaching. Instead there are several approaches which work for different people in different situations. However, in general, it is possible to distinguish between two main ways of using case studies.

The first way is to use the case study as a support and an illustration in lectures and seminars. For example, in the lecture you might explain how the case illustrates typical dilemmas or issues that policy-makers, public or private managers face and the principles that can be used to help them reach a reasonable decision. In seminars, short cases can be discussed to show the application of theory, stimulate analysis and induce evaluation. This approach to the use of case studies does not necessarily require the development and presentation of long and elaborated case studies. Extracts from newspapers and business journals can be used to great effect in investigating issues and fostering students’ analytical skills. The main advantage of this approach is that it requires relatively little preparation and constitutes an easy and gradual introduction to the use of longer and more comprehensive case studies at a later stage.

The second way of using case studies is to challenge the students to grapple with a decision-maker’s dilemma, formulate a strategy and come to a class prepared to explain and defend their recommendations. In this approach, which is usually referred to as ‘case method teaching’, the instructor either does not lecture or conducts a limited number of lectures that are complemented by the analysis of longer and more complex case studies. The role of the lecturer is to moderate a classroom discussion among the students in which the students compare their different approaches. Learning from each other, the students work together to reach a richer understanding. This requires more effort on the part of the lecturer in order to prepare the required case studies and to plan for their use in class discussion.

This chapter outlines each of these two approaches to case studies teaching. If you believe in the pedagogical value of case studies and are new to this teaching method, the gradual progression from the use of newsclips to the use of more comprehensive case studies can represent the best way of introducing this approach into your teaching. Section 2 explains how you can introduce the case method by using short newspaper articles. Section 3 focuses on ‘case method teaching’, which contemplates the use of longer and more comprehensive case studies. In both sections the overall aim is to show how you can accommodate the case method in your economics modules and, above all, to show how they help achieve the pedagogical goals discussed in subsection 1.2.