Monthly Archives: November 2016

Indian Economic Services (IES) Exam, Paper 1 : Yearwise Analysis

Hello guys. Today I will be presenting past year questions which appeared in Indian Economic Services (IES) Exam from 2009-2016, together with their marks distribution. This will give you some broad idea, about the kind of questions asked, which topics you have to prepare, is there any trend in the type of questions and how important are numericals in this exam.

Let us start with the broadest view of Paper 1, in terms of what is the proportion of marks for various topics in Paper 1, Indian Economic Services (IES) Exam.


  1. Apart from 2010 and 2014, in all other years, paper was not well distributed. It has always tilted more towards one of the topic, for instance, Consumer theory in 2011, 2012 and 2013; Theory of Value, with whooping 51% in 2015 and Statistics and Econometrics in 2016
  2. Consumer Theory and Theory of Value are most important, as is evidenced from the fact, that in no year from 2010 to 2016, their combined weightage is less than 37%. In 2012, their combined weightage is about 70%.
  3. Apart from 2012 and 2013, Part B i.e. Stats/Econometrics and Maths, carry a weight within the range of 27% to 47%
  4. Theory of Distribution and Welfare Economics, have the least weight. This does not mean that these topics are not important, because, if examiner wants he can test you on many issues from these topics, but surprisingly, that is not the case. We never know, next year they may start asking lot of questions from these topics. For that matter, about 1/4th of the paper was from Welfare Economics in 2009, but after that there is a secular decline

Now, let us start analysing questions year wise from 2009 to 2016.

Year 2009


  1. There was lot of Maths and Econometrics asked. I don’t know why, but I have a feeling that the syllabus was a bit different in 2009 from the present one (may be I am wrong) because questions like Kuhn Tucker, Shadow price, Total Factor productivity, Superlative index numbers, Quadratic forms, were never asked again.
  2. Welfare Economics also have a sizeable portion in this year. They have asked existence of equilibrium. It has been given as a proof in Nicholson and Snyder. Its weightage has been pushed up because of Public goods questions infused in this topic in the syllabus
  3. Leontieff input output model, Prisoner’s Dilemma, Lorenz Curve have been asked and will be asked many times in the future too (from 2009-2016). Guys, do remember, you cant depend too much only on regular questions only, I will tell you why, because, these regular questions are like ‘sitters’ , which every one has to do correct, your positioning will be secured if you do non traditional questions well. Having said that, you cant take a risk of getting these regular questions wrong, but dont be so satisfied with your preparation, if you can only get these regular questions correct. They are like, their doing will not give you much positives but their non-doing will give you a lot negatives. I hope you understand whatever that means 🙂

Year 2010


  1. Numericals have started peeping into the paper from this year, about 22% of the paper was numericals. You cant ignore them
  2. Apart from the above discussed repeated problems, you get some more in your bag, for example, Substitution and Income Effects, Elasticity of Substitution, Hicks-Kaldor Criterion, Scitovisky’s improvement and CLRM assumptions
  3. They have been asking Linear Programming problem repeatedly. At least do at the level of Class 12th NCERT

Year 2011


  1. Numericals have increased in their weightage from 22 % in 2010 to 34% in 2011.
  2. Other repeated topic is Elasticity of demand (but they have been asking it, in addition to its various ancillary topics ), CES production function and Price Discrimination
  3. Something from Theory of distribution have been asked and that too a very simple question

Year 2012


  1. Many new topics were added in the question paper, such as asymmetric information, Moral Hazard Problem, Risk Aversion, EV and CV
  2. They have asked a question on White Noise and Random walk, which is from Time Series Analysis. In 2016, they have asked a question from this topic too, Dickey Fuller Test
  3. Linear Programming which has been asked always as a numerical, was asked as a theoretical question. Now this is a problem, as you must also know a theoretical background of several mathematical techniques.
  4. Because of many new topics and less weightage to traditional ones, many students would have found this paper difficult. Don’t depend just on past year questions only, they should guide you into the mind of an examiner, but don’t be misguided that these are sufficient. Past year questions are NECESSARY but Not SUFFICIENT.

Year 2013


  1. Again 34% of the paper was Numerical based
  2. Most of the questions were asked from Consumer Theory and Theory of Value
  3. They have asked a question on Entry Deterrence, a topic which is a part of Paper 3. I have seen this quite a few times across papers of Indian Economic Services Exam (IES), that they ask questions, sometimes which cut across papers
  4.  Linear Programming Problem and Elasticity of demand numericals, show their presence in this year too

Year 2014


  1. I love the person who has set 2014 Indian Economic Services Paper, as he asked 51% of Numerical based problems. If someone has no grasp over mathematical techniques in economics, 2014 paper was a nightmare for him. Good thing about numericals is, that they can fetch you very high marks and bad thing is, they can pull you really low, if you do them wrongly or don’t know how to solve them
  2. The level of numericals asked in IES paper is not very high, you guys, if work little hard, can develop a knack of solving them easily. If you are a pass out from university, where they teach economics in a mathematical fashion, it should not be difficult for you
  3. They have asked quite a bit of Econometrics, for instance, Autocorrelation, Heteroscedasticity and Co-integration in Time Series Analysis

Year 2015


  1. More than half of the paper, 51% was asked only from Theory of Value. Questions from Markets have been sprinkled so generously throughout the paper, as if, someone who would have done just this topic thoroughly, would have pulled up lot of marks
  2. I have been seeing this trend since last two-three years,  that they pick up one topic and throw many questions around that. This way examiner can really make someone nervous, since you don’t know for sure, which topic they will over-emphasize this year, so you have to prepare it all, with all the length and breadth of the syllabus covered.
  3. The proportion of pure numericals fell to 37% in 2015, but apart from them, may other questions, which were asked, could not be solved without basic mathematical bent of mind

Year 2016


  1. I found this paper tough, as there were very few traditional questions. Many first timers, were asked, such as Money illusion and demand curve, efficiency-equity, proof of different elasticities (discussed in Nicholson), second order conditions, Dickey Fuller test, Market equilibrium question, ANOVA, Distributional Inequality
  2. If someone would have prepared through a traditional route, I am sure, he would have faced a lot of problem
  3. Even numericals which were asked were little tricky
  4. Prepare this paper thoroughly.  Don’t go by any trend. These would have been thoughts going on in the mind of paper setter while setting this paper. By his innovation in finding new questions, he has surely crushed may under his feet. I hope and I wish, that next year, you are not among them 🙂 . Hence, my advice is prepare everything or at least which looks like everything. Preparing some tit-bits here and there won’t help much

I hope this information would help you 🙂

All the best


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How to prepare IES (Indian Economic Services) Exam, Paper 1?

This article talks about how to prepare for Indian Economics Services Exam, Paper 1. In my view, Paper 1 is most scoring, as it contains a sizeable portion of numericals. Here, I have given list of books and articles, which could be refrerred for every topic and sub-topic in the syllabus.

Guys, Paper 1, in Indian Economic Services consists of broadly three topics :

  1. Microeconomic Theory
  2. Mathematics for Economics
  3. Econometrics and Statistics

Micro consists of broadly 3/4th of syllabus of Paper 1. It needs to be done in sufficient detail, needless to mention that. In Micro, there are broadly five topics on which any aspirant is judged.

  1. Consumer Choice
  2. Production and Costs
  3. Theory of Value
  4. Distribution Theory
  5. Welfare Economics

Consumer Theory

For Consumer Theory, Hal Varian Chapters 2-13 can be used. These topics have been dealt accordingly in Varian. They have asked normally 4-5 questions based on consumer theory in almost every year, 2009 onwards. Please make some preparation of numericals too, as examiners have been inclined in recent years towards simple application based numericals. For Numericals, you can use, Varian Workbook. That is a good source for numericals. At least do (0) and (1) level problems from Varian Workbook.

Game Theory

This is added in the syllabus in Consumer Theory section. The best resource for this is Osborne. But you dont have to do complete book. You just have to know certain very basic definitions and very simple games. I have made certain videos for this, which I guess should suffice. Osborne also has a tutorial on internet, you can also take a help from that, if you dont want to get into a trouble of reading a book.

Producer Theory

For Production and Costs, the best source is Nicholson and Snyder. This book has discussed theory and problems properly. For simple numericals, try to do, examples of these chapters, if not back questions. You will not be able to find the entire syllabus of this topic from Nicholson and Snyder, so you will have to resort to internet, but make sure, you use some academic source, not any random blog. Translog production function is discussed in the appendix of Nicholson’s Production Chapter.

I don’t know why, General Equilibrium is placed in this topic, in the syllabus. Its best placement could have been as a prelude to Welfare economics (Topic 5). Nevertheless, General Equilibrium, can be read from Ch 31-33 of Hal Varian. Also, do very simple numericals of Edgeworth box economy, at least Cobb Douglas-Cobb Douglas case. In 2009, they have also asked about Existence, uniqueness and stability of General Equilibrium. For comparison of General Equilibrium with Partial Equilibrium, relevant chapter on Partial Equilibrium can be read from Nicholson.

There is another sub-topic Measures of productive efficiency.I guess, the best would be to resort to Internet. I cant find the best book discussion this. Last I remember doing this topic, while in my undergraduate class, in Development course, using Leibenstein paper, which discussed X-efficiency.

Last sub-topic, Equilibrium of the firm and industry, can be taken up as Perfect Competition. I guess, this could also be better placed in Topic 3, Theory of Value. Anyhow, this topic can be done from Nicholson’s relevant chapter.

Theory of Value

 This topic overlaps with Topic 3 of Paper 3 (Industrial Economics). Pricing under different market structures, is a lengthy topic, and should cover pricing under perfect competition, monopoly, oligopoly, monopolistic competition. This should be done from Nicholson and Snyder. Do very simple numericals for this sub-topic, either examples from Nicholson or (0) and (1) level problems from Varian Workbook.

Some other pricings, which have been asked in the syllabus could be done from Nicholson. They are not given as a separate chapter but discussed within Chapter 15, Nicholson. My suggestion is to do, Chapter 14 and 15 of Nicholson and Snyder. Don’t do signalling from Chapter 15. Peak load pricing is properly discussed in Oz Shy. You can also read Varian, for the relevant chapters on Monopoly and Oligopoly. In my view, Varian is little simpler for this topic than Nicholson.

Guys, remember this, that this topic again has to be dealt in Industrial Economics in Paper 3. I will be dealing with that in a separate post.

Another sub-topic, Marshallian and Walrasian stability, should be done from internet, as I have not found a good resource in any standard book.

Pricing with incomplete information and Moral Hazard problems, is being dealt in the last chapters of Varian under ‘Asymmetric information’ . Moral Hazard problems can be done as an extension of Uncertainty chapter. This is done mostly in Insurance problems. While preparing for Indian Economic Services (IES) exam, you can de-empahsize numericals from this topic, as I think there is a very remote possibility of asking numericals from this topic, but we never know, so don’t come to me next year, if you find a numerical there 🙂

Theory of Distribution

This topic should be done as an overview from Tamil Nadu Board Book, Class XII, Chapter- Theory of Distribution. This chapter will give a very good introduction to this topic. Marginal productivity theory should be done under the assumption of Perfect Competition and Imperfect Competition both. This is discussed as Pricing of Factors in Nicholson. You can use Varian also for this topic.

Euler’s Theorem can be done using Internet, but also do Clark’s Theorem in addition to that.

Bilateral Monopoly is discussed in Nicholson. Very simple numericals on pricing of factors can be done from Varian Workbook. Examples of Nicholson for this topic, in my view are little upper hand, so you can leave them if you want and can trust Varian workbook only. In that too, please do only very simple problems.

Macro Distribution Theories are discussed in Kaldor’s 1955 article. That’s an authentic source, so please use that.

Welfare Economics

No book is sufficient for this sub-topic, i.e. Welfare Economics. My take is, do relevant chapters from Nicholson as well as Varian. This will give you a broad outline for this topic.

Welfare Economics is a such a big course in itself and it contains many many sub-topics so what to leave and what to do becomes little difficult. The first sub-topic, i.e. aggregation problem, in itself is very broad. One has to depend upon the internet for this. I will be depending upon Amratya Sen’s book, Collective Choice and Social Welfare, for this topic. If you look at this book, you will find Sen has discussed every chapter intuitively first and then has gone ahead to discuss theorems based on that. Every chapter marked with * in his book, is full of theorems, which you can safely leave while preparing for Indian Economic Services, but should read intuition for that definitely.

Public goods and externalities, divergence between social and private welfare is discussed in the relevant chapter under Externalities in Nicholson. For this topic, you may de-emphasize mathematical approach of Nicholson and base your understanding primarily upon intuition provided. For Public goods, you can do very simple numericals from Varian workbook, even though I have not seen any numerical been asked from this topic from 2009 onwards. Do Coase theorem, too.

Compensation principle has been asked several times. Do this topic using internet. Hicks-Kaldor approach and Scitovisky’s approach has to be done under this sub-topic.

Pareto Optimality, would have been done already while doing Ch 31-33 of Varian. Comparison of Coase and Sen, has to be done using internet.

Mathematics for Economics

Guys, Mathematics for Economics is vast course, a complete course in economics, which has been given only as a sub-topic in Paper 1 of Indian Economic Services Exam (IES).  Even looking at the syllabus, I find, this is vague. I have made some videos, using my intuition, for the topics which one should prepare, but they are in anyway not sufficient. While making notes for this topic, anyone can get confused because nobody can or should do complete Hammond and Sydsaeter ( a book on Mathematical Economics), neither one can leave this topic altogether.

My suggestion is to do functions, application of derivatives and integrals (their examples) in economics. For optimization, you must know what are first order and second order conditions; for linear algebra, do linear dependence and independence , orthogonality of vectors; in linear programming, you can use class 12th NCERT book, for very simple examples.

Input-output Model, I did last time in my undergrad class and the book we used was RS Bhardwaj. This topic should be surely done in Mathematics.

Statistical and Econometric Methods

For Econometrics, use Chapter 2-13 of Gujarati, Basic Econometrics. These are more than sufficient for Econometrics syllabus. In 2016, they have asked a question on Dickey Fuller Test, this is a topic in Univariate time series, I don’t find time series mentioned anywhere, but, since they have asked this becomes a topic to be done. My suggestion is to do a relevant chapter on Univariate Time series and Panel Data from Gujarati. Just an overview types, so that you will be in a position to write something if asked anything from these.

For Statistics,my suggestion is to use Nagar and Das. This is a small and crisp book, very good for understanding.

ANOVA, Factor Analysis, Discriminant  Analysis and Principal Component Analysis should be done from internet.

Measures of income inequality can be done using Chapter 5 of Debraj Ray (Development Economics)

My suggestions 

  1. Paper 1 is a scoring paper. Don’t leave any part untouched
  2. Past years are must.When you have prepared notes yourself, then do the relevant questions from past years
  3. Do some simple numericals too
  4. You can contact me on my mail or facebook or comments,  if you have any query


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