Finance Discipline Group
UTS Business School
University of Technology, Sydney

Working Paper Series

Title: A Critique of the Threshold Concept Hypothesis and an Application in Economics
Author(s): Rod O'Donnell
Date of publication: December 2010
Working paper number: 164
In exploring the learning experiences of students, some educationalists have advanced the 'threshold concept hypothesis' according to which certain concepts in various disciplines act as thresholds. Such concepts need to be mastered before further progress can be made in a discipline - they act like portals or entrances to be traversed before students can think like practitioners of that discipline. In economics, the concept of opportunity cost is often advanced as a prime example of a threshold concept. This paper subjects the threshold concept hypothesis to critical scrutiny on logical and methodological grounds, and then investigates its applicability to the economic concept of opportunity cost. The main conclusions are that the hypothesis has deep-seated conceptual problems, that it is subject to disturbingly elastic interpretation, that its claim to be an improvement over existing approaches is highly questionable, that some of its educational and social consequences are undesirable and that, in economics, the construal of opportunity cost as a threshold concept is unsustainable.
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