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Mark Schneider
Commissioner, National Center for Education Statistics

National Assessment of Educational Progress
The Nation's Report Card: Economics 2006

August 8, 2007

Commissioner Mark Schneider's Powerpoint Presentation MS PowerPoint (1.16 MB)


Good morning. I would like to share with you the results of the 12th Grade Economics Assessment, conducted in 2006 as part of the National Assessment of Educational Progress, or NAEP.

This was the first NAEP economics assessment and was added in response to the growing emphasis on economics instruction at the high school level. In 2006, close to two-thirds of students reported that they had taken either an advanced or a general economics course.

For this assessment, we had a national sample of over 11,000 twelfth-graders in 590 schools.

Reporting Results

Student performance is presented in two ways-as average scale scores on a 0 to 300 point scale, and as the percentage of students performing at various achievement levels.

The NAEP achievement levels-Basic, Proficient, and Advanced-are set by the National Assessment Governing Board, which sets policy for NAEP. The NAEP scale scores tell us what students know and can do, while the NAEP achievement levels provide standards for what students should know and should be able to do.

In addition to overall performance results for twelfth-graders in 2006, there are comparisons based on gender, race/ethnicity, school location, and parental education.

While separate results for each of the three economic content areas-market, national, and international-are available on the NAEP web site,, today I am presenting the overall results, which are a composite of the three content areas. I will also report results for individual questions in each of the three content areas.

All NAEP scores are based on samples. For this reason, there is a margin of error associated with every score. When comparing scores and other NAEP results, we only cite differences that are larger than the margin of error—those that are statistically significant.

Scale Score Results

On a 0 to 300 point scale, the average score for a grade is set at 150 in the initial assessment year. This average score fell in the Basic achievement range for economics. Examining scores according to performance percentiles, students at the 10th percentile had an average score of 104, which is in the below Basic range, while those at the 90th percentile had a score of 191, which is in the Proficient range.

Achievement-Level Results

Examining the results by achievement level, 79 percent of twelfth-graders performed at or above Basic, 42 percent at or above Proficient, and 3 percent at Advanced.


Male students had an average score of 152, 4 points higher than female students.

In addition, a higher percentage of male than female students scored at or above Proficient, 45 versus 38 percent. A higher percentage scored in the Advanced range as well.


White students had an average score of 158, and Asian and Pacific Islander students had an average score of 153. These students had higher scores than Black (127), Hispanic (133), and American Indian and Alaska Native students (137).

About 65 percent of 12th grade students were White, while 13 percent were Black, and 14 percent were Hispanic. Asian and Pacific Islander students made up 6 percent of the total, while Native Americans and Alaska Natives constituted 1 percent.

Achievement-Level Results by Race/Ethnicity

Looking at performance by achievement level, 87 percent of White students and 80 percent of Asian and Pacific Islander students scored at or above the Basic level. These percentages were higher than those for Black and Hispanic students—57 percent and 64 percent, respectively. The percentage of Native Americans and Alaska Natives at or above Basic—72 percent—was not significantly different from any of the other four groups.

School Location

NAEP allows comparisons of the average performance of students among those attending schools located in large cities, mid-sized cities, areas described as "urban fringe or large towns," and in areas described as "small towns or rural." Performance for these groups was largely comparable, except that students in large cities had lower scores than those in the other types of locations.

Large cities are defined as those with populations of 250,000 or more. About 14 percent of 12th grade students lived in these cities in 2006, as compared with 43 percent in urban fringe or large towns and 29 percent in small towns or rural areas.

Level of Parental Education

NAEP asks students the level of education completed by each parent. As might be expected, on average, the higher the reported level of parental education, the higher the score. Forty-nine percent of students reported that at least one of their parents graduated from college. The average score for these students was 160, placing them in the Proficient range. Students who reported that neither parent graduated from high school had an average score of 129, placing them in the Basic range.

Economics Content Areas

The economics assessment had three content areas, defined in the framework developed by the National Assessment Governing Board.

Market Economy

The first content area is Market Economy, which focuses on the economic decisions of individuals, businesses, and institutions. It is similar to the content area usually referred to as microeconomics.

Here are examples from this content domain and the percentage of students who correctly answered the questions:

  1. Seventy-two percent of students could describe a benefit and a risk of leaving a job to further one's education.
  2. Forty-six percent could interpret a supply and demand graph to determine the effect of a price control.
  3. Thirty-six percent could use marginal analysis to show how a business could maximize profits.
  4. Fifty-two percent of twelfth-graders recognized that banks use money deposited in checking accounts to fund loans to customers, rather than for other purposes such as simply letting deposits sit in their vaults until depositors make a withdrawal.

National Economy

The second content area is National Economy. Concerned with issues dealt with in macro-economics, questions in this area focus on the sum of economic decisions made within a national economy, such as the following:

  1. Sixty percent of students could identify factors that lead to an increase in the national debt.
  2. Thirty-six percent could identify the federal government's primary source of revenue.
  3. Eleven percent could explain how a change in the unemployment rate affects income, spending, and production.

A fourth example is a question on the effect of increases in interest rates on consumer borrowing. This is a "constructed-response question," which requires a written answer. This type of question constituted about 17 percent of the questions on the assessment.

In this case, students were asked to identify the effect of higher interest rates and to explain why the effect would occur. Thirty-three percent received full credit, and 24 percent received partial credit.

A student who received full credit wrote, "People will borrow less money when interest rates increase because it will be more expensive to do so."

A student who received partial credit wrote, "People will probably borrow less money if the interest rates are increased. In the end people will end up paying back more than what they borrowed." The answer doesn't explain why an increase in interest rates leads to a decline in borrowing, and for this reason the student received only partial credit.

International Economy

The International Economy area deals with trade across international borders and the benefits and costs for consumers, producers, and governments that flow from trade. Sixty-three percent could determine the effect of a decrease in oil production on oil-importing countries.

  1. Forty percent knew why industries are often successful when lobbying for tariff protection.
  2. Thirty-two percent recognized that investment in education can boost economic growth.
  3. Fifty-one percent recognized that when trading countries removed trade barriers, prices would probably decrease rather than the quality or quantity of traded goods.

More Information

The 2006 Economics Report Card provides all of this information and much more, including information on all the questions mentioned here. Additional results can be found online at Background on NAEP, more sample questions, and an online data tool that allows you to make additional comparisons on your own, are available at

Commissioner Mark Schneider's Powerpoint Presentation:
2006 12th Grade Economics Assessment MS PowerPoint (1.16 MB)