IB Economics IA: Step-by-Step Guide with Examples

Introduction: Mastering Your IB Economics Internal Assessment

The International Baccalaureate (IB) Economics Internal Assessment (IA) represents a crucial component of your final grade, accounting for 30% at Standard Level and 20% at Higher Level. Unlike traditional exams, the IA allows you to demonstrate your economic analysis skills through real-world application, connecting theoretical concepts to current events. This comprehensive guide will walk you through every step of creating a high-scoring Economics IA, complete with practical examples and expert insights.

Many students find the Economics IA challenging due to its stringent requirements and the need to balance analysis, evaluation, and conciseness within a limited word count. However, with proper guidance and a systematic approach, you can craft commentaries that not only meet IB criteria but showcase your deep understanding of economic principles.

What Is the IB Economics IA?

Understanding the IA Portfolio Structure

The IB Economics Internal Assessment consists of three independent commentaries, each based on a published news article from mainstream media. These commentaries must cover different areas of the syllabus:

• Commentary 1: Microeconomics (Unit 2)
• Commentary 2: Macroeconomics (Unit 3)
• Commentary 3: International Economics or Development Economics (Unit 4)

Each commentary is limited to 800 words maximum and is marked out of 14 points, with an additional 3 marks awarded for meeting overall portfolio requirements. This brings the total possible score to 45 marks across all three commentaries.

The Nine WISE ChoICES Key Concepts

A critical requirement is that each commentary must incorporate one of the nine key concepts from the IB Economics curriculum:

1. Scarcity – Limited resources versus unlimited wants
2. Choice – Decision-making and opportunity costs
3. Efficiency – Optimal resource allocation
4. Equity – Fair distribution of resources
5. Economic Well-being – Quality of life and standards of living
6. Sustainability – Long-term economic viability
7. Change – Economic transformation and development
8. Interdependence – Economic relationships and connections
9. Intervention – Government and policy involvement

Selecting the appropriate key concept and weaving it throughout your analysis demonstrates sophisticated economic thinking and can significantly boost your marks.

Step 1: Selecting the Perfect Article

Characteristics of an Ideal IA Article

Finding the right article is perhaps the most crucial step in your IA journey. The article you choose will directly impact the quality of your analysis. Here’s what to look for:

Essential Requirements:

• Published within the last 12 months of writing
• From a reputable mainstream source (The Economist, Financial Times, BBC, Reuters, Bloomberg)
• Approximately one A4 page or 300-500 words in length
• Contains quantitative data and statistics
• Presents a clear economic problem and potential solution

Content Criteria:

• Rich in economic concepts that can be illustrated through diagrams
• Avoids articles where analysis is already provided
• Focuses on a specific economic issue rather than broad topics
• Contains enough depth for meaningful analysis but not so complex it requires multiple theories

Examples of Strong Article Topics

Microeconomics Examples:

• Government imposing taxes on sugary drinks to reduce consumption
• Price ceiling on rent in urban areas
• Minimum wage increases in specific regions
• Carbon taxes on industries to reduce pollution
• Subsidy programs for electric vehicles

Macroeconomics Examples:

• Central bank raising interest rates to combat inflation
• Government stimulus packages during economic downturns
• Changes in unemployment rates following policy interventions
• Fiscal policy adjustments to manage economic growth
• Quantitative easing measures by national banks

Global Economics Examples:

• Tariffs imposed on imported goods
• Exchange rate fluctuations impacting trade
• Trade agreements between nations
• Foreign direct investment policies
• Economic sanctions and their effects

Where to Find Articles

The best sources for Economics IA articles include:

• Google News – Filter by economics-related keywords
• Financial Times – Comprehensive business and economics coverage
• The Economist – In-depth economic analysis
• Bloomberg – Financial and economic news
• Reuters – Global economic reporting
• National newspapers – Local economic issues with global relevance

Pro Tip: Start reading economics news from the beginning of your IB course. This habit will help you recognize suitable articles when the time comes to write your commentaries.

Step 2: Structuring Your Commentary

Recommended Word Allocation

With only 800 words to work with, every word must count. Here’s an effective breakdown:

• Introduction: 75-100 words
• Economic Problem Explanation: 100-120 words
• Diagram(s) and Labels: Not counted in word limit
• Diagram Explanation: 150-170 words
• Economic Analysis: 200-250 words
• Evaluation: 250-300 words
• Conclusion: 50-75 words

What Doesn’t Count Toward Word Limit

Understanding what’s excluded from your word count helps you maximize content:

• Diagrams and their labels
• Title and labels (axis labels, curve labels)
• Article title and source information
• Bibliography or references
• Cover sheet information

Important: Direct quotations from the article DO count toward your word limit, so paraphrase whenever possible.

Step 3: Writing an Effective Introduction

Components of a Strong Introduction

Your introduction should be concise yet comprehensive, setting the stage for your analysis. Include:

1. Brief article summary – One or two sentences explaining the economic situation
2. Key economic concept – Identify which WISE ChoICES concept you’re using
3. Economic terms – Incorporate 3-4 subject-specific vocabulary terms naturally
4. Scope statement – Indicate what you’ll analyze

Introduction Example (Microeconomics)

“The article ‘Singapore Raises Tobacco Tax by 15%’ from The Straits Times discusses the government’s decision to increase excise taxes on cigarettes to reduce smoking rates and improve public health. This commentary will analyze this intervention through the lens of market failure and negative externalities, examining how indirect taxation affects consumer behavior and market equilibrium. Key concepts such as price elasticity of demand, government intervention, and allocative efficiency will be explored to evaluate the policy’s effectiveness.”

Word Count: 78 words

This example successfully introduces the topic, identifies the key concept (intervention), uses economic terminology naturally, and outlines the analytical approach.

Step 4: Creating and Explaining Economic Diagrams

Diagram Requirements and Best Practices

Diagrams are essential for scoring full marks on Criterion A (Diagrams). Your commentary should include:

• At least one relevant diagram (most high-scoring IAs include two)
• Accurate labels using proper economic notation
• Clear titles indicating what the diagram represents
• Professional presentation – use software tools or neat hand-drawing

Essential Diagram Elements

Every diagram must include:

1. Title – Describes what the diagram shows
2. Labeled axes – Clearly marked (e.g., “Price (P)” and “Quantity (Q)”)
3. Curves/lines – Properly labeled (S, D, MSB, MSC, etc.)
4. Equilibrium points – Marked with letters (E1, E2, etc.)
5. Areas – If relevant, shaded and labeled with capital letters
6. Arrows – Showing shifts or movements

Microeconomics Diagram Example: Indirect Tax

Diagram Setup:

Title: Effect of Excise Tax on Cigarettes

Axes:
- Y-axis: Price (P)
- X-axis: Quantity (Q)

Curves:
- D (Demand curve)
- S1 (Original supply)
- S2 (Supply after tax - shifted leftward/upward)

Points:
- E1 (Original equilibrium)
- E2 (New equilibrium after tax)

Areas:
- Tax revenue rectangle
- Consumer and producer surplus areas

Diagram Explanation Example

“The diagram illustrates the impact of a 15% excise tax on cigarettes in Singapore’s tobacco market. The supply curve shifts leftward from S1 to S2, representing the per-unit tax imposed on producers. This shift creates a new equilibrium at E2, where price rises from P1 to P2, and quantity consumed falls from Q1 to Q2. The vertical distance between S1 and S2 represents the tax amount. The shaded area demonstrates government tax revenue, calculated by multiplying the tax per unit by the quantity sold after the tax implementation. Consumer surplus decreases as consumers now pay higher prices, while producer surplus also contracts. The reduction in quantity from Q1 to Q2 indicates the policy’s partial success in reducing cigarette consumption, though the extent depends on the price elasticity of demand for tobacco products.”

Word Count: 152 words

Step 5: Conducting Deep Economic Analysis

Linking Theory to Real-World Application

Your analysis should demonstrate sophisticated understanding by:

1. Applying economic theory to the article’s situation
2. Explaining causal relationships between economic variables
3. Using data from the article to support theoretical predictions
4. Incorporating your key concept throughout the discussion

Analysis Example: Taxation and Elasticity

“The effectiveness of Singapore’s tobacco tax increase depends critically on the price elasticity of demand for cigarettes. Research suggests that tobacco demand is relatively inelastic in the short run, with estimates placing PED between -0.3 and -0.5. This means a 15% tax increase might only reduce consumption by approximately 4.5-7.5%. The article notes that smoking rates have declined by 6% over the past year, supporting this theoretical prediction.

However, the long-run elasticity tends to be higher as consumers have more time to adjust their behavior, seek substitutes, or quit entirely. Young potential smokers may be particularly price-sensitive, suggesting the policy could prevent smoking initiation among youth. The inelastic demand also means the government will generate substantial tax revenue, which the article states will be allocated to healthcare services treating smoking-related illnesses.

The concept of intervention becomes relevant as this represents government action to correct market failure. Cigarette consumption creates negative externalities – healthcare costs and secondhand smoke effects – that private markets fail to account for. By raising prices through taxation, the government aims to internalize these external costs, moving the market closer to the socially optimal quantity where marginal social benefit equals marginal social cost.”

Word Count: 201 words

Step 6: Mastering Evaluation Using CLASPP

The CLASPP Framework

Evaluation separates good commentaries from excellent ones. Use the CLASPP approach to structure your evaluation:

• Consequences – Short-term vs. long-term effects
• Limitations – Constraints and drawbacks of the theory/policy
• Assumptions – Theoretical assumptions that may not hold in reality
• Stakeholders – Impact on different groups
• Priorities – Trade-offs and government objectives
• Perspectives – Alternative viewpoints or solutions

Evaluation Example: Tobacco Tax Policy

Consequences Analysis:

“In the short term, the tobacco tax generates immediate government revenue and modestly reduces consumption. However, long-term consequences may include the development of a black market for untaxed cigarettes, potentially undermining both health objectives and tax revenue. The article mentions authorities have already seized contraband tobacco worth $2 million, suggesting this risk is materializing.

Stakeholder Impact:

Different groups are affected distinctly by this policy. Low-income smokers face the greatest burden, as tobacco expenses consume a larger proportion of their income, making the tax regressive. Conversely, non-smokers benefit from reduced secondhand smoke exposure and potentially lower healthcare costs funded by public insurance. Tobacco retailers may experience revenue declines, while healthcare providers might see reduced long-term demand for smoking-related treatments.

Limitations and Assumptions:

The policy assumes price mechanisms will effectively change behavior, but addiction complicates this relationship. Nicotine dependence may cause habitual smokers to continue purchasing despite price increases, potentially causing financial hardship without achieving health improvements. The theory also assumes perfect information, yet if consumers underestimate health risks, price signals alone may prove insufficient.

Alternative Solutions:

Rather than relying solely on taxation, Singapore could implement complementary measures such as comprehensive smoking cessation programs, stricter advertising bans, or plain packaging requirements. Evidence from Australia suggests combining taxation with strong educational campaigns and support services produces superior outcomes to taxation alone. These interventions address both the price mechanism and the underlying addiction, potentially proving more effective while reducing the regressive impact on low-income households.”

Word Count: 268 words

Step 7: Crafting a Concise Conclusion

Conclusion Components

Your conclusion should:

• Summarize the main findings without introducing new information
• Restate the policy objective and your overall judgment
• Be brief – approximately 50-75 words

Conclusion Example

“Singapore’s tobacco tax increase represents a targeted government intervention addressing negative externalities in the cigarette market. While economic theory and empirical evidence suggest the policy will reduce consumption and generate revenue, its effectiveness is constrained by tobacco’s inelastic demand and potential black market development. The regressive impact on low-income smokers warrants consideration of complementary support programs to ensure equitable outcomes alongside public health improvements.”

Word Count: 66 words

Common Mistakes to Avoid

1. Exceeding Word Count

The IB is strict about word limits. Going over 800 words will result in penalties. Use these strategies to stay within limits:

• Avoid lengthy quotations – paraphrase instead
• Use ellipses (…) to omit unnecessary parts of quotes
• Be concise in explanations – every word should add value
• Remove redundant phrases and filler words

2. Superficial Evaluation

Simply listing pros and cons isn’t evaluation. Instead:

• Explain WHY something is an advantage or disadvantage
• Consider the magnitude of effects
• Discuss likelihood of outcomes
• Make judgments based on evidence

3. Using Inappropriate Articles

Avoid:

• Articles older than 12 months
• Blog posts or opinion pieces from non-mainstream sources
• Articles where economic analysis is already provided
• Topics without clear diagrammatic representation

4. Neglecting the Key Concept

Your chosen WISE ChoICES concept should be:

• Introduced in the introduction
• Woven throughout your analysis
• Explicitly connected to your evaluation
• Not just mentioned once and forgotten

Assessment Criteria Breakdown

Understanding How You’re Marked

Each commentary is assessed on five criteria:

Criterion A: Diagrams (3 marks)

• Accurate, relevant, and properly labeled diagrams
• Must be integrated into your analysis
• Should illustrate key concepts effectively

Criterion B: Terminology (2 marks)

• Appropriate use of economic vocabulary
• Terms used correctly in context
• Demonstrates subject knowledge

Criterion C: Application and Analysis (3 marks)

• Relevant economic theory applied to the article
• Clear explanation of economic relationships
• Data from article supports analysis

Criterion D: Key Concept (2 marks)

• One of nine WISE ChoICES concepts identified
• Concept helps frame the analysis
• Integrated throughout the commentary

Criterion E: Evaluation (4 marks)

• Critical assessment of the policy/situation
• Considers multiple perspectives
• Makes supported judgments
• Uses CLASPP effectively

Criterion F: Portfolio Requirements (3 marks)

• Three commentaries from different syllabus units
• Different key concepts used
• Different sources from varied regions

Practical Tips for Success

Time Management

• Start early – Begin collecting potential articles months before deadlines
• Draft completely before seeking teacher feedback (you only get one review per commentary)
• Allocate 15-20 hours for your complete IA portfolio
• Plan submission timeline – space out your three commentaries

Presentation Standards

• Use professional diagram software or neat hand-drawing with ruler
• Include a proper cover sheet with required information
• Highlight relevant sections of your article
• Ensure anonymous submission (no name on commentary itself)
• Create a bibliography even though it’s not mandatory

Seeking Help Effectively

• Submit your best possible draft to your teacher for the one allowed review
• Consider hiring an IB Economics tutor for additional guidance
• Join study groups to discuss article selection and approaches
• Use IB Economics resources and exemplar IAs for reference

Real Example Analysis: Minimum Wage Commentary

Sample Article Scenario

“Country X Raises Minimum Wage by 20% to Combat Income Inequality”

Key Concept: Equity

Syllabus Area: Microeconomics

Abbreviated Commentary Structure

Introduction (85 words): “Country X’s government recently announced a 20% increase in the national minimum wage, raising it from $8.50 to $10.20 per hour, effective immediately. This policy intervention aims to address growing income inequality and improve living standards for low-wage workers. This commentary will analyze this measure through the concept of equity, examining how government intervention in labor markets affects wage distribution, employment levels, and resource allocation. Economic theory regarding price floors, labor market dynamics, and income distribution will be applied to evaluate the policy’s potential effectiveness and unintended consequences.”

Analysis Focus:

• Application of price floor theory to labor markets
• Examination of potential unemployment effects
• Discussion of income redistribution impacts
• Analysis of wage elasticity of demand for labor

Evaluation Considerations:

• Short-term employment disruption vs. long-term wage growth
• Impact on small businesses vs. large corporations
• Regional variations in labor market conditions
• Alternative policies (Earned Income Tax Credit, job training programs)

This structure demonstrates how to approach a microeconomics IA systematically, ensuring all criteria are addressed while maintaining focus and conciseness.

Conclusion: Your Path to IA Excellence

The IB Economics IA represents an opportunity to showcase your analytical abilities and economic understanding through real-world application. By following this step-by-step guide – from selecting data-rich articles and creating precise diagrams to conducting deep analysis and thoughtful evaluation – you can craft commentaries that meet and exceed IB expectations.

Remember these key takeaways:

• Choose articles wisely – data-rich, recent, and from reputable sources
• Structure deliberately – allocate words strategically across sections
• Diagram professionally – accurate labels and clear presentation matter
• Analyze deeply – connect theory to reality with supporting evidence
• Evaluate critically – use CLASPP to examine multiple dimensions
• Stay concise – respect the 800-word limit while maximizing impact

Success in the Economics IA requires patience, practice, and attention to detail. Start early, seek feedback strategically, and approach each commentary as an opportunity to demonstrate your economic literacy. With dedication and the strategies outlined in this guide, you’re well-equipped to achieve top marks and develop analytical skills that extend far beyond your IB experience.

Your Economics IA journey begins with a single article – choose it carefully, analyze it thoroughly, and let your economic reasoning shine through every word of your commentary.