Creating a Classroom Token Economy
The purpose of this guide is to assist in setting up a classroom token economy. Students will learn GPS economics concepts as they earn, invest, and spend classroom currency. The following set up can be catered to suit your preferences.
Materials:
- Some form of currency that the students can touch: poker chips, laminated money
- Classroom prizes for bidding or purchase (possibilities: school supplies, toys, homework passes, computer time, trade seat with another student passes, etc)
General set-up:
- Students earn money each day for activities such as completing homework assignments, performing classroom jobs, random acts of kindness, etc. After each 9 weeks, increase the amount of money that students earn. This simulates inflation.
- Each Friday is bank day: students deposit their money in the “bank” (i.e. hand it to the teacher) and earn 10% interest on their bank total.
- At the end of each 9 weeks, hold a classroom auction where students can spend their money. Unspent money remains in their account. Be sure to review each economic term and how it applies to the auction.
- During the second 9 weeks, students will quickly discover that those who saved their money will increase their bank balance more rapidly due to money earned in interest. To encourage spending during the second nine weeks auction, impose a 50% tax on money remaining in their bank accounts after the auction has finished.
- At the end of the third term impose a 75% tax after the auction.
Extension ideas:
- Stock market option. Each Friday or every second Friday students may invest all, some, or none of their bank money into a classroom stock market in lieu of the guaranteed 10% interest. Roll 2 dice to determine how the market does that week. Use the table below to determine how much the students gain/lose on their investment.
Total rolled / Percent earned or lost on their investment
2 / 30% of investment lost
3 / 20% of investment lost
4 / 10% of investment lost
5 / 0% of investment lost
6 / 10% of investment gained
7 / 10% of investment gained
8 / 20% of investment gained
9 / 20% of investment gained
10 / 20% of investment gained
11 / 30% of investment gained
12 / 30% of investment gained
Note that the table is meant to mimic reality, where historically the stock market as a whole outperforms regular savings accounts over long periods of time. For ease of calculating, only allow investments in increments of $10. Advanced students can assist in the calculations.
- Lottery option (based on the “Pick 3” lotto): The purpose is for students to discover the low probability of becoming rich through winning the lottery. Students can purchase one ticket for $5 in an attempt to win the jackpot (e.g. $100). To win, students must correctly pick 3 numbers 1-6 in the same order as they show up on 3 dice that are rolled one at a time.