If you are interested in finance and economics and you want to do a PhD you need to decide whether you want to have EconPhD or PhD in Finance. Many universities have both degrees in their offer. In this post I will write why, in my opinion, going for an EconPhD seems to be a wiser route then pursuing FinPhD, even if you want to work in finance after completing your PhD program.
First, while doing a PhD in Economics you can write you thesis on financial topics. Economics Department are usually so large that you can find many finance oriented professors in them. To give an example in Department of Economics at Harvard University you have Andrei Shleifer, Efraim Benmelech, John Y. Campbell, Jeremy C. Stein, who are very much finance oriented. There are many other examples of top finance profs in top economics departments, so even if you are doing your PhD in Economics Department, you can write PhD thesis which are finance oriented. On the other hand, finance departments are usually quite small and don't give that kind of flexibility. It will be hard for example to diverge with your topic from pure finance to microeconomics during your PhD in Finance. Second, EconPhD gives clear signals. In all private and public organizations people know exactly what EconPhD is. They know what they should expect from EconPhDs. Finance PhD programs are less established and usually have shorter histories. Also curricula of different FinPhD programs differ considerably. Its not like EconPhD where you always have Micro, Macro, Econometrics plus some options. Every Finance PhD program is different. The only plus for Finance PhD, in my opinion, is that usually continuous time statistics (stochastic differential equations) is often a part of the basic curriculum. If you want to do research in finance during you EconPhD you have to learn it by your own.
Generally, EconPhD is a safer option. It is considered to be more general (and it is) , so in the future you can use it to find a job even if it is not finance oriented.
Saturday, August 11, 2007
PhD in Economics or PhD in Finance?
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3 comments:
I completely agree with all of these comments. I began taking econ classes as an undergrad because I felt that the content of these courses complimented what I was learning in my political science classes (I now have a bachelor’s degree in political science). Although my knowledge of the world of finance is obviously vastly below that of a PhD student, what I have learned from one of my econ professors (who is very finance-oriented) is that economists are able to think critically about how problems fit into the “big picture”, and this analytical ability contributes to a more comprehensive understanding of financial markets. Finance students may be masters at crunching data, but economists possess the intellectual tools to truly understand it, and this understanding, I think, is much more valuable in the long run.
JRo--
I concur, since I used to be a finance major before I converted to econ. I definitely didn’t like my finance and accounting classes because they were really boring and cut and dried. On the other hand, the econ classes I took made me feel like I was acquiring broad, useful knowledge that could be applied to things other than finance. Also, just because you are skilled in working with numbers, they mostly just function to help you clarify the underlying concepts. Economics makes you a better thinker, and it makes you want to learn more. I work at a bank now and haven’t been in the field for very long, but if I had to pick between having a Ph.D. in econ and one in finance, I’d definitely pick econ, I think it’s more impressive.
I happen to disagree. I hold a PhD in finance from the business school of a university that has a top 10 econ phd program in the US. I had (and still have) several friends from the PhD econ track. I did however, despite being less smart, get considerably more job offers upon completion, both academic jobs - even at econ departments - and from the private sector. I was offered a salary that was around 50% higher than my econ fellow graduates.
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