Do You Need Maths For A-Level Economics?
One of the biggest questions students ask before choosing A-Level Economics is whether they need to be good at maths.
The reassuring answer is that you do not need to be an exceptional mathematician. If you are reasonably comfortable with GCSE Maths, particularly percentages, graphs and simple calculations, you should be able to cope with the mathematical side of the course.
Economics does involve numbers. You will use data, calculate percentage changes, interpret graphs and work with ideas such as index numbers and elasticity. But the maths is usually there to help you understand the economics. It is not the main purpose of the subject.
In fact, students often find the interpretation harder than the calculation itself.
What Maths Will You Actually Use?
The main mathematical skills used in A-Level Economics include:
percentages and percentage changes;
averages;
ratios;
index numbers;
interpreting tables and graphs;
elasticity calculations;
distinguishing between real and nominal values;
working with economic data.
Most of these ideas will already be familiar from GCSE Maths. The calculations are generally straightforward once you know which method to use. The more important question is often what the answer means.
A student may be able to calculate that prices have risen by 4%, for example. The harder task is explaining how that increase might affect households, businesses, wages or interest rates.
If you would like to see exactly what this maths looks like, with some worked examples, read What Maths Do You Actually Need for A-Level Economics?.
Percentages and Percentage Changes
Percentages appear throughout A-Level Economics. You may need to calculate how much prices have risen, how rapidly an economy has grown or how unemployment has changed.
Suppose the price of something rises from £100 to £120. The increase is £20. Since £20 is 20% of the original £100, the price has risen by 20%.
A useful formula is:
Percentage change = (new value − original value) ÷ original value × 100
So:
(£120 − £100) ÷ £100 × 100 = 20%
The same method works for a fall.
If the price falls from £100 to £80:
(£80 − £100) ÷ £100 × 100 = −20%
The minus sign shows that the value has fallen.
The important point is that the percentage change is calculated relative to the original figure.
A Doubling is a 100% Increase
This sometimes causes confusion.
Suppose sales rise from 500 units to 1,000 units. Sales have doubled.
The increase is 500 units. Since 500 is 100% of the original 500, the percentage increase is 100%.
Understanding Reported Percentages
Being able to calculate percentages is useful, but students also need to understand what reported percentages mean.
Suppose the inflation rate is reported as 3%. This means that the general price level is approximately 3% higher than it was over the comparison period. It does not mean that every price has risen by exactly 3%. Some prices may have risen much more. Others may have fallen. The published figure is an average based on a large collection of goods and services.
You also need to be careful when a percentage increase sounds dramatic.
Imagine a new coffee shop sells 20 cups of coffee in its first month and 40 cups in the same month a year later. Sales have risen by 100%, which sounds impressive. But the business is still selling only 40 cups. A large percentage increase can start from a very small base.
This is why economists look at both percentage changes and the actual numbers behind them.
Year-on-Year and Month-on-Month Changes
Economic data is often reported either year on year or month on month.
A year-on-year figure compares a particular month with the same month one year earlier. For example, if inflation in July is reported as 3% year on year, this means average prices are about 3% higher than they were in July the previous year.
A month-on-month figure compares one month with the immediately preceding month. If prices rise by 0.2% month on month in July, this means they are 0.2% higher than they were in June.
Year-on-year comparisons are often useful because they reduce the effect of seasonal patterns. For instance, ice cream sales are usually higher in July than in June, but this may well simply reflect warmer weather. Comparing July this year with July last year may therefore tell us more about the longer term ice cream sales trend than comparing July with June.
The same issue arises with Christmas shopping, tourism, energy use and many other areas of the economy.
Percentages and Percentage Points
Students often confuse percentage changes with changes in percentage points.
Suppose the unemployment rate rises from 3% to 6%.
The unemployment rate has increased by 3 percentage points.
But it has also risen by 100%, because 6% is twice as high as 3%.
Both statements are correct, but they describe the change in different ways.
Similarly, a fall in inflation from 5% to 3% is a fall of 2 percentage points. It is also a 40% reduction in the inflation rate.
In most economic discussion, the percentage-point change is usually the clearest way to describe movements in rates such as unemployment, inflation or interest rates.
Index Numbers
Economists often use index numbers to show how something changes over time.
An index normally starts with a base value of 100.
Suppose an index of house prices is 100 in the base year and rises to 110 the following year. This means house prices are, on average, 10% higher than in the base year. If the index rises to 125, prices are 25% higher than in the base year.
Index numbers are useful because they allow many different prices or quantities to be combined into one measure.
Inflation is measured using price indices. These track the prices of a large collection of goods and services over time.
You are not usually expected to calculate the entire inflation index yourself. However, you do need to understand what an index represents and how to interpret changes in it.
Why Weightings Matter
Not every product matters equally when inflation is measured.
Households spend more on some things than others. A change in the price of electricity therefore has a greater effect on household budgets than the same percentage change in the price of something purchased only occasionally.
Different items in a price index are given different weights to reflect their importance in household spending.
Imagine a very simple fruit and vegetable price index containing apples, bananas and carrots. If households spend much more on apples than carrots, apple prices should have a larger influence on the index.
The same applies to where people shop. If most households buy fruit and vegetables from supermarkets, supermarket prices should receive more weight than prices from shops used by relatively few people.
This is why published inflation figures are more sophisticated than a simple average of a few prices.
They are also estimates rather than perfect measurements. It would be impossible to record the price of every product in every shop throughout the country.
Graphs and Tables
A-Level Economics uses many graphs.
Some are based on economic data. Others are diagrams used to show relationships between variables.
You may need to identify trends, compare different periods or explain why one figure has risen while another has fallen. The main challenge is not usually reading the numbers. It is interpreting the pattern carefully.
For example, a graph might show that economic growth is slowing. This does not necessarily mean the economy is shrinking. It may still be growing, but at a lower rate. Similarly, a fall in the inflation rate does not mean prices are falling. It means prices are rising more slowly than before.
These distinctions are extremely important in economics.
Elasticity Calculations
You will also meet elasticity.
Elasticity measures how strongly one variable responds when another changes.
For example, price elasticity of demand examines how much the quantity demanded changes when price changes.
The calculation involves percentage changes rather than advanced mathematics.
The harder part is often interpreting the result.
A business needs to know whether a price increase is likely to cause only a small fall in sales or a much larger one. The calculation is useful because it helps explain how consumers might respond.
Elasticity will be covered fully in a separate Core Resource. At this stage, it is enough to know that the maths is manageable and based mainly on percentages.
Real and Nominal Values
Another idea students meet is the distinction between nominal and real values.
A nominal value is measured in current money terms. A real value has been adjusted for inflation.
Suppose someone’s salary rises by 4%, but prices rise by 6%. Their nominal salary has increased, but their real purchasing power has fallen.
This is a good example of why economic calculations need interpretation. A pay rise may look positive until inflation is taken into account.
What Students Usually Find Hardest
Most students do not find the arithmetic itself especially difficult.
The greater challenge is usually one of the following:
deciding which calculation is needed;
selecting the correct original value;
interpreting a graph carefully;
distinguishing percentages from percentage points;
explaining what the answer means;
applying the calculation to an economic argument.
That final step matters most. An examiner is rarely interested only in whether you can calculate a figure. You may also need to explain why it matters and how it affects different groups.
Do You Need A-Level Maths?
You do not normally need to study A-Level Maths in order to take A-Level Economics. Students who take maths may feel especially comfortable with the quantitative parts of the course, but it is not essential for most students. A reasonable level of confidence with GCSE Maths is usually enough.
The most helpful qualities are a willingness to practise, care when reading questions and an interest in understanding what the numbers mean.
Can You Use a Calculator?
Yes. Calculators can be used in A-Level Economics examinations. That does not remove the need to understand the method. You still need to know what to calculate and how to interpret the answer. However, you are not expected to perform every calculation mentally.
The Maths Supports the Economics
The mathematical side of A-Level Economics should not put you off. You will use percentages, graphs, index numbers and simple formulas. These skills matter, but they are there to support the economic analysis.
Calculating that inflation is 3% is usually straightforward. The more interesting question is why inflation is 3%, who is affected and what might happen next.
Drawing a graph may also be straightforward. The real skill lies in explaining the chain of events shown by it.
If you are comfortable with GCSE Maths and willing to practise, you should be able to cope well with the mathematical demands of A-Level Economics.
Further Reading
If you're thinking about studying A-Level Economics, you might also find these guides helpful:
What Maths Do You Actually Need for A-Level Economics? – A practical guide to the percentages, averages, index numbers, elasticity and economic data you will use during the course.
What Will You Learn in A-Level Economics? – An overview of the course, the topics you'll study and the skills you'll develop.
Economics Isn’t Really About Money — It’s About Choices – Money matters, but Economics is mainly about how people, businesses and governments make choices when resources are limited.
Is A-Level Economics Difficult? – What students typically find challenging and how to overcome those difficulties.
Why Study A-Level Economics? – How Economics helps you understand the world and the opportunities it can open up.
If you're ready to begin learning the subject itself, the natural next step is Scarcity: The Fundamental Economic Problem.