What is involved in earning an Economics Ph.D.?

Question

I am planning on going to grad school for my Ph.D. I am torn between Finance and Economics. I know I want to be a professor, so Economics is a viable option. I am concerned about the types of math involved. I do well in statistics, because I understand why I am using the applicable equations and functions. "Memorization math" is rather difficult for me. Anyone with a degree in either Finance or Econ, please weigh in. For what it's worth, I am a woman. I don't know if there are many women going into Econ. programs, so that may help a little with admissions and financial aid.

Answer 1

There are tons of women in Econ and Finance.  I am currently a doctoral student in Financial and Monetary Economics.  At least half are women if not slightly more than half.  If you are looking for pay, go Finance, they get paid more, if you are looking for the science go Economics because you are a curious person.  A Finance PhD gets more than an Economics PhD because a Finance PhD is akin to an Engineer whereas a Financial Economics PhD is akin to a Physicist in terms of relationship.  Wall Street needs lots of builders and really doesn't like it when economists rock the boat with science that doesn't fit what their customers want.

You will not find memorization mathematics in a PhD program.  You need calculus and statistics, but most programs will help you get up to speed as well.  Prior to starting my PhD program I reread and answered the bulk of my undergraduate calculus text, but it didn't prepare me really.

Economists use calculus in ways very different from the physical sciences and my textbook really was meant for the physical sciences.  There sort of is memorization involved.  You have to be able to prove that what you are hypothesizing should be valid and you have to be able to prepare econometric tests to test your hypothesis.  You have to know tons of specific things, but you only really need to know them without thinking on your doctoral comps.  Other than that, you can look up a specific test, rule or theorem as long as you really understand them and know why they work.  You sort of have to know how to think and what to look for.  Being able to solve a simple problem like forward rates is mandatory but if you are not being tested, it is something you can look up the specific for when you need it.  At the PhD level problems often have no textbook solution already built in, so you may find yourself solving a statistical problem that no one has built a test for yet.  You have to understand the principles involved, not memorize when to use Tukey's test.  You could look that up if you had too.  

In my case, I am solving a problem that has never been solved in economics and I have had to invent a mathematical operator to even discuss the issue.  My work will change Finance, assuming I am correct of course.  In fact, I am going to create an enormous body of headaches for the Finance profession as a whole.  I have likely solved a mystery that makes much of their engineering moot.  Neither profession is standing still.

That is the difference.  Most Finance assumes what Economics finds to be true.  Whereas an economist may very well investigate the credibility of a theory, a finance professor may be building tools based on them.  In practice a financial or monetary economist needs to know a wider range of things, but the trade off is usually less specific tool building knowledge than a finance professor.

My math is okay, but not the greatest, even though I am doing some extremely intense math.  If you have the mathematical and economic intuition and lots of time, you can work your way through any problem.  My experience of this program at least was that they want you to succeed and we have a few brilliant economists who struggled tremendously with the math, but their intuition and insight is incredible.  The same thing is true of those who struggled with time series analysis.  They are opting for professions that handle other types of problems than time series, but it was in everyone's self interest that they have sufficient competence to get a B out of the class.  They put in a ton of time, but people spent time with them.  

One thing about a PhD program, there is no such thing as a C.  There is a conversation about how nice it was to work with you and how they hope you will prosper in your life outside academia, but there are no Cs.

A PhD in economics involves, at least in my program, a couple of methods courses, three econometrics courses, two microeconomics courses and two macroeconomics courses, four field courses, we have a methods course that is also sort of a peer review process where our research work we are doing gets discussed in somewhat of a seminar format with our fellow students and supervised by one or two faculty experienced in the area of research.  We see what each other is doing and get a lesson from the person doing the work in what, why, and how their research is being done.  And there are four major field courses and two minor field courses.  In my case, four financial and two monetary courses.  

In the first year you are learning how to think about problems.  At the undergraduate level you are sort of taught "xyz is true or believed to be true."  At the master's level you are learning the principles behind it at greater depth.  At the doctoral level you are proving the principles themselves and testing them for validity.  In the second year you do a lot of replication research.  You are either given, or find existing empirical research which you then criticize, collect data to test it in other settings, times or conditions and then extend the research beyond where it started.  It isn't bad, because it turns out it is very difficult to replicate what often appear to be very simple studies.  You can spend hours banging your head against a wall trying to get your data clean only to find the statistical test you thought you could use (they used it after all) actually won't apply anymore because the changes you made to the data cause you a whole new round of headaches.

Once you can replicate the work of others, you can start working on problems that are beyond simple replication studies.

One note, business professors of all types make higher wages than University presidents when research grant money is included.  A starting Economics professor, teaching in a doctoral institution makes about $95,000 but could be making only $45,000 at a community college.  As a rule, there are no geographical boundaries anymore for economics professors, so you choose on what part of the planet you want to work.

Answer 2

A lot! Clearly the first responder has not read your post. I went to grad school for a PhD in economics for the very same reason. Since you want to be a teacher opposed to a researcher you do not need to get into a top tier school. The website www.econphd.net has some great ranking information that you should look through. Place your emphasis on schools that allow you to teach independent courses as this will better prepare you for the job market.

Nevertheless, even mid-ranked schools still require math. I went in with 3 semesters of calculus, 2 two semesters of statistics, and 1 semester of linear algebra and differential equations. My GPA for these courses was 3.81 and I had to work hard to pass the q-exams as I had difficulty with the proofs in Mas-Colell.

Answer 3

Honestly, don't waste your money. The only jobs for you are teaching. If you want to work on Wall Street, you need to be going to Columbia or Princeton and get connections.  All I'll say is that your job opportunities will be limited. So if you are going for that degree, make sure you get some "good" connections along the way to give you the hook up.

Answer 4

You are going to need to be comfortable with calculus for either of those fields at the Masters or Ph.D. level.

Congratulations on being a woman.  Why do you think you should get better placement or financial aid because of that?  Do you realize that asking for preferential treatment based on your gender is exactly the kind of thing that makes people discount your value when you try to get placement in the real world?

If you have what it takes to succeed on a level playing field, wouldn't you reject the idea of anyone having reason to think you were provided an unfair advantage?  It seems to me it would not be in your own best interests.

Fight hard for equal treatment, but reject preferential treatment.  Then no one can take anything away from what you achieve.