Economics Extended Essay

The Extended Essay (EE) is an independent, self-directed piece of research, culminating in a 4,000-word paper. Along with Theory of Knowledge (TOK) and CAS, the EE is an important component in the IB Core (Read more about the IB core here). Whichever subject you decide to do it on, it is equally as important to spend time on this, because failing to achieve the minimum grade is a failing condition, and you will not be able to receive your diploma.

Take a look at the table below for the grade you aim to achieve:



Hopefully, everyone will be aiming for the maximum 3 points by obtaining AA or AB/BA for the EE and TOK. It is important that you strive to obtain an A for EE to maximize your chances to get all 3 points, since it is much more difficult to get an A in TOK. Likewise to the economic IA commentaries, the EE requires patience to complete, but if you put in the effort to do it, the results are very worth it.

The 4000 word limit will not include the following:

• Headers and footers
• Abstract (Separate 300-word section)
• References
• Contents Page
• Tables/Charts/Graphs and their headings
• Diagrams
• Images
• Bibliography

*Subheadings count, make sure the word count is not over 4000, otherwise you will lose 4 points immediately for formal presentation!

So, many things are expected of everyone to create a high quality piece of work, but not to worry, I will share with you my experiences how to write your EE and hone it to perfection. Of course, I cannot guarantee that your final EE grade will be an A, but a B is very viable to achieve. Lets get started!

Choosing your EE Question

Choosing your topic question is one of the hardest part of the EE. Having a good research question will enable you to analyze your question better, and automatically get you 2 points (Criteria A)! It could be frustrating because your supervisor may reject your question many times before you finally find one that is good for you. To be honest, it is not as hard as one think it is!

To help you come up with a good topic question, here are a few things you should do:

• Focus your topic question on microeconomics. You will not be able to do thorough analysis of a macroeconomic topic in 4000 words or less. Microeconomics focuses on individuals and firms, not the whole economy.
• Try to focus your analysis to the different market structures. The 4 market structures are: Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly.
• Use the phrase, "To what extent is.......a '_______'. Your question should not bring you to an absolute conclusion, it should always to be to an extent. For example, it is assumed by most people that Apple Inc., the leading technology company, is a monopoly in its industry. After analysis of data, it can have characteristics from other market structures as well such as oligopoly or possibly monopolistic competition.
• Use a topic that is unique to everyone else. Many people usually take topics from last year's essays or even before that. It's not only boring, but repetitive. The only impression your supervisor and examiner will get is fake passion for the subject; it will not earn you many points in your viva voce so avoid that. A very good way is to go out and look around your local area or shopping malls, find any new or famous brand names, or even no name shops in the local market. For example, for my topic, I decided to focus on to what extent is Apple Inc. a monopoly in the HK teenage market. Why? Because not only are Apple products very popular among teenagers, Apple Inc. have decided to open a new 11,000 sq. feet store in IFC Mall and planning another 20,000 sq. feet store in Hysan Place.

Example EE Question: "To what extent is the company Apple Inc. a monopoly in the current Hong Kong teenage market?"

Research

Often with an economics EE, in order to answer your research question, you have to some independent research. The majority of your research will be from secondary sources, however, in order to get the top marks, you have to do some primary research that are sophisticated. Make sure you do your research as soon as possible after you finalized your research question, because you have to do the research first before you start writing.

Primary research: this is the harder of the two to do. You have to know what type of information you are looking for. Here are a few good examples:

• Headcount of people over a period of time
• Questionnaire
• Interview (Usually the tougher one to do)

Secondary research: these are usually found from internet sources or books. Research that have already been conducted by another person. Always reference where you get these information.

After you have done your research, start writing it up!

Introduction

Your introduction essentially outlines how you got to your essay question, why are you picking to do this question and how you are going to do it. This is one of the most important parts of the essay, because the introduction sets the path your essay is going to take.

My sample EE Introduction:

During the past decade, despite the economic recession, the consumer electronics industry has experienced a period of rapid growth, with new technological products becoming globally available for majority of consumers. The company that has revolutionized this growth was Apple Inc. following the introduction of the iPhone 3G in 2007. Currently, Apple Inc. has overtaken American Oil and Gas Company Exxon Mobil, becoming the most valuable company in the world ^[1]. Amongst the company’s range of products, Apple Inc. is most famous for its trademark smartphone, the iPhone, and laptop, the MacBook.

Hong Kong is the world’s freest economy and one of the world’s most competitive business and financial markets as measured in the 2012 Index of Economic Freedom ^[2]. The lack of government regulation and intervention in the market accompanied by the low income/corporate tax rate makes Hong Kong one of the most internationally recognized business centres in the world; allowing more freedom for large corporations to operate to their best interests. With the recent expansion of demand in the Asian market, the consumer electronic goods industry is currently the fastest growing industry in Hong Kong. On the 27^th of September 2011, Apple Inc. opened its first Hong Kong Apple Store at IFC Mall. It boasts impressive figures; 15,000 sq. feet and an $11 million HKD monthly rent, making it the one of the largest and most expensive Apple Store’s in the world. In the third quarter of 2012, Apple Inc. plans to open another Apple Store in Hysan Place, Causeway Bay, which will be 20,000 sq. feet. The total construction cost for the two stores will be $40 million USD ^[3]. Apple Inc.’s recent development in Hong Kong and its popularity among the teenage market makes it a topic worthy of investigation to test against established forms of market structures.

To evaluate one aspect of Apple Inc’s recent development in the most free economy in the world,

Hong Kong, the research question: “To what extent is the company Apple Inc. a Monopoly in the current Hong Kong Teenage Market?” was formed. For this research, the two products that will be focused on are smartphones and laptop because it can be observed that smartphones and laptops are essential for the teenage group. They are necessities for teenagers to maintain their social networking, communication and studying.

The first paragraph describes the rise in Apple Inc.'s popularity, which gives an implication that Apple Inc. is a monopoly already. Then the second paragraph gives a description of the place I am talking about, and why it is good for monopolies to form there, due to the lack of government intervention in Hong Kong. Lastly, the third paragraph tells the reader that I am trying to evaluate what I have talked about above, then state the research question.

Hypothesis

In this next section, you tell the readers what your hypothesis will be, but also say that you have to consider various other factors that may possibly affect your overall conclusion.

My sample EE hypothesis:

It was hypothesized that the company Apple Inc. in the current Hong Kong teenage market is a monopoly. The proposition was based on Apple Inc.’s popularity in the teenage market and their constant innovation for new products. Based on this hypothesis, the consideration of various types of market structures is necessary. It is also predicted that some of its products may reflect different market structures, so this research will consider the possibility of Apple Inc. exhibiting other market structure features, and will demonstrate how various features of market structures such as oligopoly, monopolistic competition and perfect competition can be applicable to Apple Inc. and observed by various means.

The opening sentence should state your what your hypothesis is. Then you should state why this is the reason. Next, even though you believe your hypothesis is correct, you will still need to consider different various market structures. After saying this, then you need to talk about the prospect of different market structures being associated to the area you are analyzing.

Methodology

For the methodology, it will be best if you separate primary research and secondary research. You should give quite a detailed diary of the research you have undertaken and the reason for using this particular method of research. Do not waste too much of your word count writing the methodology, use it in the analysis. After describing the primary and secondary research, it is optional to create a theoretical framework. This is to help the examiner better visualize the structure of your essay.

Primary research example paragraph:

To investigate the research question thoroughly, approaching the teenage group is essential to collect primary data. To improve the accuracy of the results, a wide range of imaginative sets of data was collected. The questionnaire was carried out at King George V School. The survey was conducted from the 17^th of February to the 17^th of March; a period of one month. A total of 556 responses were recorded and are then illustrated into charts and diagrams, and analyzed to show the characteristics of various market structures under the company Apple Inc. A sample of the survey is attached in Appendix I.

In addition to the survey, investigation into Apple Inc.’s consumer relationship is necessary to deduce the reason for its popularity among the teenage market. The newly-built Apple Store at IFC mall provides an ideal research location for this investigation. A data collection of daily customer flow was based on the headcount at 15 minute intervals and an observation has been made on one day: 17^th of March 2012.

Theoretical Framework example:

*A theoretical framework is an extremely great way to impress examiners because it is unique, it differentiates a good EE from an outstanding EE, and it shows the examiner that you have devoted alot of your time to write this, naturally, it can be seen from the quality of the work.

Data and Analysis

Now this is where the stuff gets real. The analysis, the most important part of the EE, will determine whether your essay will be good or bad.

Things you should do:

• Use suitable charts to illustrate the results from your primary research. They should be labeled correctly and displayed boldly to allow your reader clear understanding of your chart. Differentiate between table and chart and number accordingly.
• First, analyze your chart, only stating the statistics and data. Then use economic theory to analyze what your results mean. Finally, come to mini-conclusions about each analysis and graph.
• Always reference your analysis to the market structure your research question stated.
• Use proper economic terminology at all times. Inconsistency shows lack of knowledge and is sloppy.
• Relate your analysis to the characteristics of the 4 market structures. If analysis does not match characteristic, then you can eliminate it completely from further analysis.
• Draw your own market structure graphs. Taking it from another source is not only lazy, which will cost you marks, but you would also be able to control how your graphs look.

Conclusion

In the conclusion, you should restate the mini-conclusions to form the bigger conclusion. You can just leave it at this if you find you are running out of words to write, if not, then you can rate your findings on a likert scale. A likert scale is a means of using a scale from 0-10 to rate the approximation to two oppositely different things.

E,g. Price competition and Non-price competition, Large number of sellers and Single seller, No barriers to entry, High barriers to entry etc.

Of course, 10 should be the rating for the characteristic closest to the market structure you stated in your research question.

My conclusion example:

The Hong Kong teenage smartphone and laptop markets are characterized by having a large number of firms and high barriers to entry. The prices of both Apple products are above the mean price, suggesting that to some extent the company has some monopoly power to set its own prices. Also, the narrow price range of the smartphone market and the wider price range of the laptop market indicate different degrees of price interdependency, meaning Apple Inc. could experience different degrees of competition in these two markets. Furthermore, Apple Inc.’s use of product differentiation techniques is evident; functions/software and quality are the main influence on the teenage market’s buying decisions. However, the influence of school on the sales of HP laptops is much greater. Lastly, Apple product users acquire knowledge from Apple Inc.’s marketing strategies, showing non-price competition being used to compete against other companies. These factors provide evidence that Apple Inc. may more closely resemble an oligopoly rather than a monopoly. Now, the smartphone and laptop market will be separately evaluated and compared to each other. The reason for doing this is to see whether different degrees of market structure may exist in Apple Inc. The characteristics of a monopoly were rated from 0-10 on a likert scale ^[19]; with 10 being the closest to a monopoly.

Likert Scale example:

Evaluation

Evaluation, the closing bit of your essay, it should leave a lasting impression to the reader. In the evaluation, you should always aim to be critical about yourself and the methods you used, stating the limitations. Put the word count at the end of the final paragraph in square brackets.

Bibliography

Do's

• Combine both websites and books into one list
• List out in alphabetical order
• Any repetitions from a single book should be listed out as a single book without page numbers
• Remove the hyperlink from your website sources

Don'ts

• Separate websites and books
• Write sources that you have not included in your essay

Abstract

The abstract is a 300-word summary of your essay. This should be written after you finish writing essay. First, you should briefly state how you formed the research question and the research question itself. Afterwards, give a short summary of your methodology. Then talk about your results and conclusion to your research question. It's that simple! Make sure to limit the word count to no more than 300 words, otherwise you will get 0 points for the abstract.

My abstract example:

This essay investigates Apple Inc.’s recent development in the Hong Kong teenage market and the market structures that applies to it. The research question “To what extent is the company Apple Inc. a monopoly in the current Hong Kong Teenage Market?” was formed.

Smartphones and laptops, which are regarded as necessities to the teenage market, are discussed in this research to show various market features in Apple Inc. In order to understand these two markets, both primary and secondary data were collected. A survey on smartphone and laptop usage by teenagers, market prices, factors of price/non-price competition, and headcount of Apple Store customers. Afterwards, data on the respective market shares of all smartphone and laptop companies was obtained from professional and independent market research companies.

The results from the data analysis revealed that Apple Inc. is not a pure or dominant monopoly; instead, the market is characterized by a few dominant competitors. It shows that each company prices their products differently; Apple Inc. sets both its products above the market price, indicating that it has strong influence on the market. Although Apple Inc. owns significant monopoly power, it experiences different degrees of competition between the two markets. The data also reveals that Apple Inc. engages in both price and non-price competition between its competitors. Apple Inc. attempts product differentiation by developing its own mobile and desktop operating systems. The small number of firms and high barriers to entry eliminates the presence of perfect competition or monopolistic competition in Apple Inc.

While some market surveys show that Apple Inc. is a monopoly, the existence of some other market features that are similar to an oligopoly such as non-price competition and few dominant sellers suggests that to a considerable extent Apple Inc. is not completely monopolizing the current Hong Kong teenage market. [Word count: 300]

Grade Boundaries

The predicted grade boundaries for the May 2011 session are approximately:

A-30-36

B-25-29

C-17-24

D-9-16

E-0-8

Final tips

• Do not leave your essay until the last minute. Start immediately when the EE is launched, otherwise it will be a painful journey. Many people in my year complained that they did not have enough time, but the truth is they are ignorant about the EE itself. Remember, work hard now, and be rewarded late for your efforts. (Also, I really hate people who post on Facebook saying how busy they are and pictures of late night efforts, hoping to get attention. To me, they give off an impression that they were slackers.)
• Work on your EE everyday; make small changes when you have time. Sacrifice a bit of your Facebook or YouTube time to hone and refine your EE to the highest standards possible.
• Use a consistent referencing style. For example, the APA system or the Harvard system. My personal preference is the APA system because it uses footnotes rather than in-paragraph brackets that could disrupt the flow of your essay.
• Do not be subjective, the EE and Economics itself is very scientific. Personal thoughts within your essay is going to kill you (not literally, but you get the idea)
• Utilize your supervisor and other teachers who are experts on the EE to their fullest. Unlike with the econ IA commentaries, you can let them read as many times as you want. They would be glad to help you, but please be polite!
• Be critical about your own work. Only when one is critical, are they able to reach their full potential. Development stops when one is too pleased with him/herself. Never be pleased with your first draft, there are always room for improvement because there does not exist a perfect essay.

Hopefully I was able to be of some help to many of you, have fun in your EE journey!