The flipped classroom is gaining prominence as an active learning pedagogy to engage a new generation of students. However, all courses do not lend themselves to a fully flipped design and instructors are often reluctant to flip lectures due to the additional time and effort involved, especially so in case of technical subjects such as economics. This study experiments with a flipped classroom design in a first-year undergraduate economics course. The research was motivated by the fact that many undergraduate economics students do not engage with traditional lectures. They fail to acquire critical thinking, data handling and reasoning skills, which are thought to be at the core of the economics curriculum. In this flipped classroom format, traditional lectures were substituted with micro-lectures and the remaining class time was devoted to active learning pedagogies including quizzes, group work and student presentations. The full lectures were panopto recorded and put up on the e-learning site, Blackboard. In order to evaluate the effectiveness of the flipped classroom format, I compared the final exam scores of students in the flipped classroom with those in the control group, which followed a traditional lecture-based approach. The key results from the analysis revealed that students in the flipped classroom performed better in the final exams vis-à-vis students in the traditional classroom format. Furthermore, students in the flipped classroom format were 1.61 times less likely to fail in the module as compared to students in a traditional classroom format. This format also resulted in better student engagement, more flexibility and enhanced student–tutor interactions within the classroom.