Month: October 2012

Academics and the Principle of Marginality

When we sit back to analyze our academic results we often list out a variety of reasons for our performance. These typically include: motivation or the lack of it, focus or the lack of it, the teaching standards and the difficulty of a subject.

But I believe it all comes down to arguably the most important theorem in economics: The Principle of Marginality. It states a particular activity should be chosen such that it yields the highest utility(profit) upon each additional unit of effort(cost) as compared to other activities.  This fundamental principle lies at the heart of many government policies and multi million dollar deals.

To illustrate this principle, consider the following example taken from the book Why Markets Fail? by John Cassidy. A Robinson Crusoe figure is stranded on an island and wonders how he should devote his time and energy to maximize his well being.  Should he spend more time on hunting or fishing, on building a shelter or making clothes? The answer is that he should spend his time in such a way that the additional benefit yielded by another hour devoted to any one of them is the same. If it is easier to catch a fish than hunt for a deer, he should head for the shore. If the roof is leaking in rain, he should repair the roof.

But how is all this related to academics you might think.

We all know that the academic grades are directly linked with the time you spend studying. However the study time needed to obtain a particular mark need not be the same of all since some may be able to study faster than others. But fast learners are no different than slow learners as far as the end results are concerned.  So for a particular student, the more number of hours spent studying results in higher grades and the point at which he stops studying decides his grades.

So when does he stop studying? He stops studying when he finds another activity which would give him a higher utility( read pleasure or satisfaction) for an additional unit of time spent on it. Toppers find no such activity and for them, academics would always yield the highest return and thats the reason for their  straight A’s. While some might be content with a few B’s  and instead of trying to convert them into A’s they would spend the extra time to relax as it would give them a higher utility.

The point is that whatever grades you obtain; the condition of marginality is satisfied as always.