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Admissions comparison -- PhD Finance vs. PhD Economics

By rcwlhk June 4, 2008 in PhD in Business

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I am starting my doctoral studies in Finance this fall. I'll attempt to share all my observations and thoughts based upon your questions.

(1) Clearly, there are close similarities between the core courses between a PhD Finance student and a PhD Economics student. I believe both need to go through the entire micro, macro and metrics sequence.

I don't know about top tier programs but for the following tier, you take micro,macro and metrics sequence relying on your concentrations. Some guys might not necessarily take micro and macro courses. For example, if you have already taken these courses in intermediate level in undergraduate or masters level, you might not take them. Even more to exemplify, most students with Economics courses does not take these courses.

(2) PhD Finance programs appear to be more competitive. But I would like to add a slight caveat --- while on absolute numbers basis, it does seem so (i.e. 3 - 5 admits per school). But please do correct me if I'm wrong, but it seems the number of applicants to PhD Finance programs are also smaller than that of Economics. An example (I know there are more schools out there but I just picked one as an illustration. Feel free to give further examples or counter-examples!) Northwestern Kellogg PhD Finance: 8 Admitted; 196 Applied; 4.08% Yield Northwestern PhD Economics: 18 - 25 Admitted; 600 Applied; 3.00% - 4.17% Yield So, it seems that at least for Northwestern, I don't see a significant difference between the yield (admitted / applied ratio) of PhD Finance and PhD Economics programs. So, in such cases, do absolute numbers matter more than the ratios?

I partly agree and partly disagree with your opinion. The portion that I agree with you is, - no doubt on that- , business schools admit only small numbers per specialization whereas economics departments have more crowded incoming classes. The part that I don't agree with you is that I think PhD Finance programs have more number of applicants and since these programs give full and generous funding and provide better opportunities and options after graduation, these programs are much more competitive. On another perspective, people apply to economics because they think that they are more likely to receive admission letter from econ. departments. Don't be so bothered with numbers. Decide which one you are more interested in.

(3) Just going through the profiles of PhD Finance and PhD Economics students, I've noticed the following trends (please correct me if I'm wrong): -There's a higher proportion of Economics students with Masters degrees and/or previous academic experiences (i.e. research assistant, publication, etc) than their Finance counter parts -There are many more Math majors going into Economics programs than Finance -Very few individuals going into Finance programs had a Finance / Business undergraduate training; but a good number of them have MBA's -Most of those who are admitted to Finance programs had some form of industry work experience (typically in investment banks, consulting firms, hedge funds, etc) -The strongest observation that I've made is that, it seems there are a plethora of examples of individuals at top tier Finance programs with significant work experience (i.e. 5 years or more) and did not have a math / hard science undergrad / master background. This leads me to wonder --- how many of these admitted individuals have real analysis (which appears to be VERY IMPORTANT in the TM Econ forum), graduate level econ / math / finance courses, and top Finance / Econ professors writing LOR's for them? That's the end of my observations.

I have been directly admitted to PhD. Finance from undergraduate. I might be an exceptional example but I already with some guys in the same situation. However, most of the guys, who were planning to go for PhD Finance, had some graduate degrees and extensive work experience somehow. Most of them were above their mid twenties.

Hope this helps!

Thanks for the detailed insight --- especially from a PhD Finance student-to-be!

(1) I wasn't aware that in PhD Finance, there's some flexibility in regards to the economics courses that one is required to take. But that's interesting info!

(2) I don't want to be argumentative or defensive (as I really do appreciate all of your inputs), but I still cannot find the concrete quant data to support that PhD Finance is MUCH MORE competitive than their PhD Economics counterparts.

I'm just adding more data points here (and again, by no means exhaustive):

Figures shown below as: Admits (or enrolled, whatever is available) / Applicants (% Ratio)

Finance: 4 / 75 (5.3%)

Economics: 23 / 178 (12.9%)

http://www.biz.uiowa.edu/phd/Fall07AdmResults.html

Finance: 4 - 6 / 300 (1.3% - 2.0%)

Economics: 30 - 40 / 1000 (3.0% - 4.0%)

NYU > Economics > Graduate Program > Ph.D. Programs > Bulletin

That's all I can find in my 15 min search. But so far, I'd venture to say that it is inconclusive. (But Iowa was definitely very interesting). As well, and I think this has been noted before, very few schools give detailed breakdowns of their business school admits and so, the Finance admit-to-application figures are incredibly difficult to find.

(3) I don't think you touched on this before but would you please comment further? That is, the typical math aptitude of PhD Finance admits. I still can't think of a very good reason to explain why or how some of these people with many years of work experience + a non-math / hard science background can get pass the "math requirements" of the PhD Finance program. Does this hint to the notion that the process is indeed more "random" than PhD Economics? Or perhaps I'm just thinking in a totally different direction.

I also do recognize that the math requirements in corporate finance and asset pricing are vastly different; namely, less math (relatively speaking) in corporate finance and more math in asset pricing (especially theoretical material).

@ Iowa Finance: 4 / 75 (5.3%) Economics: 23 / 178 (12.9%) http://www.biz.uiowa.edu/phd/Fall07AdmResults.html NYU Finance: 4 - 6 / 300 (1.3% - 2.0%) Economics: 30 - 40 / 1000 (3.0% - 4.0%) PhD NYU > Economics > Graduate Program > Ph.D. Programs > Bulletin

Arizona University, Tucson also says that they receive about 40-50 applications annually, and only admit 2 to 4 of them (Finance PhD). The pattern is similar in most schools: Fewer applications in Finance but the chance of enrollment is more slim in Finance then it is in Economics. I explained the reasons elaborately in my post forehead.

(3) I don't think you touched on this before but would you please comment further? That is, the typical math aptitude of PhD Finance admits. I still can't think of a very good reason to explain why or how some of these people with many years of work experience + a non-math / hard science background can get pass the "math requirements" of the PhD Finance program. Does this hint to the notion that the process is indeed more "random" than PhD Economics? Or perhaps I'm just thinking in a totally different direction. I also do recognize that the math requirements in corporate finance and asset pricing are vastly different; namely, less math (relatively speaking) in corporate finance and more math in asset pricing (especially theoretical material).

I think schools prefer guys with quantitative analysis. Let's think of an investment banker, or someone who has extensive quantitative skills. And assume that this guy has a masters in Mathematical Finance. This guys knows how the financial sector works, and he is experienced. Excellent choice!! But I don't know about the guys with hard science are enrolled in Finance PhD program. They might have convincing letters of recommendation and a fantastic SOP to convince the faculty about that. Do you imagine a finance faculty, which is interested in enrolling and FUNDING students with no math background. Finance requires some math background, at least at calculus level. I still doubt about guys just enrolled with basic calculus. It is very hard to sustain in Finance PhD without strong quantitative skills. I see the issue as nearly impossible, in my personal judgment.

For my case, I don't have much work experience, just some intern in accounting field, but I am still an undergraduate that has taken Calculus, Mathematical Economics, Statistics, Mathematical Statistics, Econometrics, Applied Econometrics. We can say that I am familiar with Math :) The fact is that you forget math when you do not use it for years.

Hi all, I would really appreciate any input on this topic!

I'm just coming to the end of my first year in a phd finance program, so here's what I've learned so far....

The % admittance to finance vs top econ schools is similar but there's a huge difference in level. Finance programs are much much smaller. That means even if you're really well qualified for a finance program, it is still very likely to get rejected. If you go that route, apply to a lot of schools. I did about 12 & that almost wasn't enough! Once you're in though, they want you to succeed too.

Econ departments have less of a random factor in the admittance part - they figure once you're in they'll see if they like you and if not cut you out in the first couple of years. Once you're in, you also need to do better than other students to stay in.

Depends on the program, but in mine the first year is basically the same as for first year econ students. They have to do macro in the 1st year, whereas it is an elective for us in the 2nd year & we have some finance seminar courses instead, but pretty much if I & an econ student planned our electives right, we could end up both doing exactly the same courses.

(2) PhD Finance programs appear to be more competitive.

The problem is the randomness of the process. To get into finance you need to be good + be very lucky, or apply to a much large number of schools to have a good shot at getting in somewhere.

Business schools are more likely to value some pertinent non-academic work experience on the whole, particularly if it gives you inside knowledge of some area of industry. As far as math ability, in econometrics classes, the finance students tended to usually be towards the top of the distribution in such exams. Econ seems fine with a good knowledge of calculus, maybe some ode's for macro, linear algebra & analysis. If the finance program specializes in asset pricing, they'll probably also be looking for more of the wacky math at admittance - other kinds of analysis, stochastic calc. pde's etc as well.

This leads me to wonder --- how many of these admitted individuals have real analysis (which appears to be VERY IMPORTANT in the TM Econ forum), graduate level econ / math / finance courses, and top Finance / Econ professors writing LOR's for them?

Yes, yes & no in that order at least for me! For other data, I had 3 years of academic research + several years banking industry experience.

That's some very good insight! Thanks a lot!

I'm just coming to the end of my first year in a phd finance program, so here's what I've learned so far.... The % admittance to finance vs top econ schools is similar but there's a huge difference in level. Finance programs are much much smaller. That means even if you're really well qualified for a finance program, it is still very likely to get rejected. If you go that route, apply to a lot of schools. I did about 12 & that almost wasn't enough! Once you're in though, they want you to succeed too. Econ departments have less of a random factor in the admittance part - they figure once you're in they'll see if they like you and if not cut you out in the first couple of years. Once you're in, you also need to do better than other students to stay in. Depends on the program, but in mine the first year is basically the same as for first year econ students. They have to do macro in the 1st year, whereas it is an elective for us in the 2nd year & we have some finance seminar courses instead, but pretty much if I & an econ student planned our electives right, we could end up both doing exactly the same courses. The problem is the randomness of the process. To get into finance you need to be good + be very lucky, or apply to a much large number of schools to have a good shot at getting in somewhere. Business schools are more likely to value some pertinent non-academic work experience on the whole, particularly if it gives you inside knowledge of some area of industry. As far as math ability, in econometrics classes, the finance students tended to usually be towards the top of the distribution in such exams. Econ seems fine with a good knowledge of calculus, maybe some ode's for macro, linear algebra & analysis. If the finance program specializes in asset pricing, they'll probably also be looking for more of the wacky math at admittance - other kinds of analysis, stochastic calc. pde's etc as well. Yes, yes & no in that order at least for me! For other data, I had 3 years of academic research + several years banking industry experience.

Just another question popped into my mind and I hope you could share some insight on this!

With regards to the mathematic skills one needs to get admitted into PhD Finance vs. PhD Economics, what do you think are the key differences? I know you touched on this briefly on your previous post but I'm hoping you could expand on it.

And yes, I do realize that most programs' official prerequisites are just multivariable calculus, linear algebra, statistics and maybe real analysis. But "realistically speaking" (i.e. to have a realistic chance of getting in), what additional math skills do we need here? Specifically what are the differences and similarities for PhD Finance vs. PhD Economics? (i.e. Does Finance prefer candidates to have stochastic calculus whereas it may be not so important in Economics? Conversely, perhaps Economics prefer people to have greater skills in ODE than in Finance?) :grad:

Not knowing the mind of the admissions commitee, I can only venture a guess, but anything that sets you apart from the large stack of applications with very high quantitative scores is a good thing! It would depend somewhat on the program. If you're looking at departments that do theoretical asset pricing then a background in such things would tie in nicely. In general you're much more likely to end up actually using it in a finance program than in economics. For less theoretical or more corporate places, it's not nearly as likely to be a critical decision maker, but again, having something that makes you stand out would be the thing.

On the whole, differences between econ & finance department requirements are probably outweighed by differences due to departmental focus on such things as theory vs empirical focus, as well as idiosyncratic variations due to who comprises the admit commitee that year.

Probably if I had to do the application over again & had the time, I'd do a few extra statistical theory classes, pde's or linear analysis, more because they are useful than anything else. I'd also spend more time getting good LOR's and vet my SOP through more people that know what a phd program is like.

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Finance vs economics: what you need to know

Careers Published 13 Dec, 2022 · 4-minute read

From household budgeting to international policy, finance and economics impact the daily lives of individuals and communities around the world – in ways you mightn’t even notice. Despite being two distinct disciplines, finance and economics often interconnect and can sometimes appear to be interchangeable.

You may be left wondering how each area of study differs from the other, how they intersect, and why it even matters.

If you’re curious about expanding your career opportunities with postgraduate study in finance, economics, or a unique combination of both, it may be helpful to break down these complex topics and start off with the basics.

What is finance?

Finance can be understood as the management of money. As an area of study, finance looks at wealth, currency, and capital assets, such as property and stocks.

Broadly speaking, finance can be categorised into 3 distinct groups:

personal finance
corporate finance
public finance.

If you work in finance, your job may involve investing, lending, budgeting, and forecasting on behalf of individuals, organisations, or governments. Financial practices can include understanding cash flow, profit, interest rates, relationships with shareholders, risk and return, and creating value.

What is economics?

Economics is a branch of knowledge connected to everyday life in different ways throughout history and societies. It's often concerned with the production, exchange, consumption, and scarcity of wealth and resources.

As a social science, economics can be used to analyse the behaviour of individuals or groups by looking closer at what makes people act on certain choices. Governments of all countries are advised by economists to implement various policies to run the country well.

Key differences between studying finance and economics

The differences between these 2 distinct fields are important to note – especially when you’re considering which is best suited to your career ambitions.

“By studying finance, you will learn more about how to manage funds available to individuals or firms, while studying economics will give you an opportunity to learn how to apply economics policies and tools to deal with various economic issues like poverty or economic growth to govern a country well.”

- Dr Shino Takayama, UQ School of Economics Senior Lecturer and UQ Master of International Economics and Finance program leader

A finance degree can typically involve practical courses in accounting, financial reporting, quantitative analysis, and corporate finance.

By studying finance, you can gain the knowledge and ability to:

source suitable investors to borrow money
create budgets to plan the spending of organisations
lend funds in the form of a loan for property or other large expenses.

While finance in a lot of ways can be defined by the direct use and management of money, economics considers both material and non-material resources and how the scarcity of resources can impact local or global markets, goods and services, and human behaviour. An economics degree may involve mathematics, statistics, micro and macroeconomics, and a variety of economic theory.

By studying economics, you can learn how to:

measure the total value of a country’s gross domestic product
analyse government policies on trade, tax, and investment
examine the impact of supply and demand when innovating new products.

The Master of International Economics and Finance creates a holistic student journey that develops key innovative skills in both international economics and finance.

Can’t choose between studying finance and economics?

By studying finance and economics and creating a specialty informed by both disciplines, you can equip yourself with a distinctive skillset.

Rameez Tayob found his experience studying UQ’s Master of International Economics and Finance diversified his proficiency across economics and finance on a corporate and international scale.

“Studying a master’s that incorporates both finance and economics has allowed me to see how the various unique concepts in economics and finance overlap in the commercial world,” he says.

“When creating financial models, you can identify predictions that are derived from economic indicators.”

By combining finance and economics in the same master’s degree, the Master of International Economics and Finance taught him the advanced analytical and modelling skills needed to succeed in data analytics, business strategy and risk advisory on a global scale.

Whether you study economics, finance or both, you can rest assured you'll be getting a world-class education here at UQ. We've been ranked the #1 university in the country by the Australian Financial Review in 2023.

My UQ program helped me gain the theoretical knowledge and practical experience to engage with complex issues in society, lead as an industry change maker, and forge a successful career.

Start an economics and finance degree from any discipline

If you’re considering study in a new field outside your existing skillset, Dr Shino Takayama advises a key aspect of the Master of International Economics and Finance is that newly enrolled students don’t need to have any prior knowledge of economics or finance.

“The Master of International Economics and Finance creates a holistic student journey that develops key innovative skills in both international economics and finance,” she says.

“Students in the program experience a flexible learning journey that provides the necessary foundations in economics and hands-on application of economic theory and techniques.”

Shino emphasises the program’s focus on offering strong foundational courses to ensure students can diversify their capabilities, so they’re well positioned for employability.

"The Master of International Economics and Finance aims to enhance existing skills obtained during undergraduate studies and work experience,” Shino says.

“With this degree, a variety of future career paths around the world are open to you, including work in academia, policy and legislation, or corporate environments such as banks, or market research companies.”

Learn how to contribute meaningful insights and innovative solutions in different economies around the world with the UQ Master of International Economics and Finance .

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The complete guide to getting into an economics PhD program

The math is easier than you might think.

Back in May, Noah wrote about the amazingly good deal that is the PhD in economics. Why? Because:

You get a job.
You get autonomy.
You get intellectual fulfillment.
The risk is low.
Unlike an MBA, law, or medical degree, you don’t have to worry about paying the sticker price for an econ PhD: After the first year, most schools will give you teaching assistant positions that will pay for the next several years of graduate study, and some schools will take care of your tuition and expenses even in the first year. (See Miles’s companion post for more about costs of graduate study and how econ PhD’s future earnings makes it worthwhile, even if you can’t get a full ride.)

Of course, such a good deal won’t last long now that the story is out, so you need to act fast! Since he wrote his post , Noah has received a large number of emails asking the obvious follow-up question: “How do I get into an econ PhD program?” And Miles has been asked the same thing many times by undergraduates and other students at the University of Michigan. So here, we present together our guide for how to break into the academic Elysium called Econ PhD Land:

(Note: This guide is mainly directed toward native English speakers, or those from countries whose graduate students are typically fluent in English, such as India and most European countries. Almost all highly-ranked graduate programs teach economics in English, and we find that students learn the subtle non-mathematical skills in economics better if English is second nature. If your nationality will make admissions committees wonder about your English skills, you can either get your bachelor’s degree at a—possibly foreign—college or university where almost all classes are taught in English, or you will have to compensate by being better on other dimensions. On the bright side, if you are a native English speaker, or from a country whose graduate students are typically fluent in English, you are already ahead in your quest to get into an economics PhD.)

Here is the not-very-surprising list of things that will help you get into a good econ PhD program:

good grades, especially in whatever math and economics classes you take,
a good score on the math GRE,
some math classes and a statistics class on your transcript,
research experience, and definitely at least one letter of recommendation from a researcher,
a demonstrable interest in the field of economics.

Chances are, if you’re asking for advice, you probably feel unprepared in one of two ways. Either you don’t have a sterling math background, or you have quantitative skills but are new to the field of econ. Fortunately, we have advice for both types of applicant.

If you’re weak in math…

Fortunately, if you’re weak in math, we have good news: Math is something you can learn . That may sound like a crazy claim to most Americans, who are raised to believe that math ability is in the genes. It may even sound like arrogance coming from two people who have never had to struggle with math. But we’ve both taught people math for many years, and we really believe that it’s true. Genes help a bit, but math is like a foreign language or a sport: effort will result in skill.

Here are the math classes you absolutely should take to get into a good econ program:

Linear algebra
Multivariable calculus

Here are the classes you should take, but can probably get away with studying on your own:

Ordinary differential equations
Real analysis

Linear algebra (matrices, vectors, and all that) is something that you’ll use all the time in econ, especially when doing work on a computer. Multivariable calculus also will be used a lot. And stats of course is absolutely key to almost everything economists do. Differential equations are something you will use once in a while. And real analysis—by far the hardest subject of the five—is something that you will probably never use in real econ research, but which the economics field has decided to use as a sort of general intelligence signaling device.

If you took some math classes but didn’t do very well, don’t worry. Retake the classes . If you are worried about how that will look on your transcript, take the class the first time “off the books” at a different college (many community colleges have calculus classes) or online. Or if you have already gotten a bad grade, take it a second time off the books and then a third time for your transcript. If you work hard, every time you take the class you’ll do better. You will learn the math and be able to prove it by the grade you get. Not only will this help you get into an econ PhD program, once you get in, you’ll breeze through parts of grad school that would otherwise be agony.

Here’s another useful tip: Get a book and study math on your own before taking the corresponding class for a grade. Reading math on your own is something you’re going to have to get used to doing in grad school anyway (especially during your dissertation!), so it’s good to get used to it now. Beyond course-related books, you can either pick up a subject-specific book (Miles learned much of his math from studying books in the Schaum’s outline series ), or get a “math for economists” book; regarding the latter, Miles recommends Mathematics for Economists by Simon and Blume, while Noah swears by Mathematical Methods and Models for Economists by de la Fuente. When you study on your own, the most important thing is to work through a bunch of problems . That will give you practice for test-taking, and will be more interesting than just reading through derivations.

This will take some time, of course. That’s OK. That’s what summer is for (right?). If you’re late in your college career, you can always take a fifth year, do a gap year, etc.

When you get to grad school, you will have to take an intensive math course called “math camp” that will take up a good part of your summer. For how to get through math camp itself, see this guide by Jérémie Cohen-Setton .

One more piece of advice for the math-challenged: Be a research assistant on something non-mathy . There are lots of economists doing relatively simple empirical work that requires only some basic statistics knowledge and the ability to use software like Stata. There are more and more experimental economists around, who are always looking for research assistants. Go find a prof and get involved! (If you are still in high school or otherwise haven’t yet chosen a college, you might want to choose one where some of the professors do experiments and so need research assistants—something that is easy to figure out by studying professors’ websites carefully, or by asking about it when you visit the college.)

If you’re new to econ…

If you’re a disillusioned physicist, a bored biostatistician, or a neuroscientist looking to escape that evil Principal Investigator, don’t worry: An econ background is not necessary . A lot of the best economists started out in other fields, while a lot of undergrad econ majors are headed for MBAs or jobs in banks. Econ PhD programs know this. They will probably not mind if you have never taken an econ class.

That said, you may still want to take an econ class , just to verify that you actually like the subject, to start thinking about econ, and to prepare yourself for the concepts you’ll encounter. If you feel like doing this, you can probably skip Econ 101 and 102, and head straight for an Intermediate Micro or Intermediate Macro class.

Another good thing is to read through an econ textbook . Although economics at the PhD level is mostly about the math and statistics and computer modeling (hopefully getting back to the real world somewhere along the way when you do your own research), you may also want to get the flavor of the less mathy parts of economics from one of the well-written lower-level textbooks (either one by Paul Krugman and Robin Wells , Greg Mankiw , or Tyler Cowen and Alex Tabarrok ) and maybe one at a bit higher level as well, such as David Weil’s excellent book on economic growth ) or Varian’s Intermediate Microeconomics .

Remember to take a statistics class , if you haven’t already. Some technical fields don’t require statistics, so you may have missed this one. But to econ PhD programs, this will be a gaping hole in your resume. Go take stats!

One more thing you can do is research with an economist . Fortunately, economists are generally extremely welcoming to undergrad RAs from outside econ, who often bring extra skills. You’ll get great experience working with data if you don’t have it already. It’ll help you come up with some research ideas to put in your application essays. And of course you’ll get another all-important letter of recommendation.

And now for…

General tips for everyone

Here is the most important tip for everyone: Don’t just apply to “top” schools . For some degrees—an MBA for example—people question whether it’s worthwhile to go to a non-top school. But for econ departments, there’s no question. Both Miles and Noah have marveled at the number of smart people working at non-top schools. That includes some well-known bloggers, by the way—Tyler Cowen teaches at George Mason University (ranked 64th ), Mark Thoma teaches at the University of Oregon (ranked 56th ), and Scott Sumner teaches at Bentley, for example. Additionally, a flood of new international students is expanding the supply of quality students. That means that the number of high-quality schools is increasing; tomorrow’s top 20 will be like today’s top 10, and tomorrow’s top 100 will be like today’s top 50.

Apply to schools outside of the top 20—any school in the top 100 is worth considering, especially if it is strong in areas you are interested in. If your classmates aren’t as elite as you would like, that just means that you will get more attention from the professors, who almost all came out of top programs themselves. When Noah said in his earlier post that econ PhD students are virtually guaranteed to get jobs in an econ-related field, that applied to schools far down in the ranking. Everyone participates in the legendary centrally managed econ job market . Very few people ever fall through the cracks.

Next—and this should go without saying— don’t be afraid to retake the GRE . If you want to get into a top 10 school, you probably need a perfect or near-perfect score on the math portion of the GRE. For schools lower down the rankings, a good GRE math score is still important. Fortunately, the GRE math section is relatively simple to study for—there are only a finite number of topics covered, and with a little work you can “overlearn” all of them, so you can do them even under time pressure and when you are nervous. In any case, you can keep retaking the test until you get a good score (especially if the early tries are practice tests from the GRE prep books and prep software), and then you’re OK!

Here’s one thing that may surprise you: Getting an econ master’s degree alone won’t help . Although master’s degrees in economics are common among international students who apply to econ PhD programs, American applicants do just fine without a master’s degree on their record. If you want that extra diploma, realize that once you are in a PhD program, you will get a master’s degree automatically after two years. And if you end up dropping out of the PhD program, that master’s degree will be worth more than a stand-alone master’s would. The one reason to get a master’s degree is if it can help you remedy a big deficiency in your record, say not having taken enough math or stats classes, not having taken any econ classes, or not having been able to get anyone whose name admissions committees would recognize to write you a letter of recommendation.

For getting into grad school, much more valuable than a master’s is a stint as a research assistant in the Federal Reserve System or at a think tank —though these days, such positions can often be as hard to get into as a PhD program!

Finally—and if you’re reading this, chances are you’re already doing this— read some econ blogs . (See Miles’s speculations about the future of the econ blogosphere here .) Econ blogs are no substitute for econ classes, but they’re a great complement. Blogs are good for picking up the lingo of academic economists, and learning to think like an economist. Don’t be afraid to write a blog either, even if no one ever reads it (you don’t have to be writing at the same level as Evan Soltas or Yichuan Wang ); you can still put it on your CV, or just practice writing down your thoughts. And when you write your dissertation, and do research later on in your career, you are going to have to think for yourself outside the context of a class . One way to practice thinking critically is by critiquing others’ blog posts, at least in your head.

Anyway, if you want to have intellectual stimulation and good work-life balance, and a near-guarantee of a well-paying job in your field of interest, an econ PhD could be just the thing for you. Don’t be scared of the math and the jargon. We’d love to have you.

Update: Miles’s colleague Jeff Smith at the University of Michigan amplifies many of the things we say on his blog. For a complete guide, be sure to see what Jeff has to say, too.

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INOMICS Salary Report

Is an Economics PhD Worth It? The PhD Pay Premium

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Economics students may often wonder if doing a PhD is the right move for them. After all, you can still get a good job in economics with just a Master’s degree. We’ve covered different angles of this topic before with helpful advice about what degree you’ll need as an economist , asking whether you should do a PhD , and even asking what kinds of economists are paid the most . Thanks to INOMICS Salary Report 2023 data, we can look more closely at the pay benefit for an economics PhD in today’s job market. This will help you decide if doing an economics PhD will be worth it for your own career.

Perhaps unsurprisingly, the typical PhD in economics earns more than the typical economist with “only” a Master’s degree. But how much more? Is doing an economics PhD program worth it in the long term?

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The short answer: yes. INOMICS Salary Report data shows that in 2023, economics PhDs earned on average 96% more than economists with a Master’s degree. These are worldwide statistics taken from the full breadth of the INOMICS Salary Survey data.

The benefit to doing a PhD in economics varies by region. Figure 1 compares the “earnings premium” that an economics PhD has over economists with a Master’s degree across the world, using 2023 INOMICS Salary Survey data.

Figure 1: Regional Premiums in economics PhD pay compared to a Master’s

Clearly, in most regions acquiring a PhD in economics offers quite the premium. Some results may stand out as surprising, however.

First, in North America in particular, the premium for earning a PhD in economics seems smaller than expected. If a PhD only earns an economist an extra 36% increase in wages, ignoring a PhD and continuing to work might seem like a preferred option in this high-wage region.

In the Caribbean, South & Central America and Africa, PhD earnings are below Master’s earnings. This unexpected result appears to be the case due to the distribution of survey respondents. In both regions, the amount of industry economist respondents is much larger than academic respondents, and Master’s-degree-holding economists outnumber PhD economists in Government, Central & International Bank, and private business roles. These three categories of employer tend to pay more highly than others. This suggests that in these two regions, acquiring a PhD may not be necessary to have a well-compensated industry career. Further, it seems more realistic for Master’s-degree-holding economists to attain high-paying roles in these sectors without a PhD, as opposed to many other regions where a PhD would be considered a requirement.

As the previous discussion just showed, Figure 1 doesn’t account for the different sectors that economists work in. In general, economists who work in industry tend to earn very high wages, while economists who work in academia earn noticeably less until they are finally promoted to a full Professor of Economics. Then, academic economist pay catches up to industry pay. This is a trend noted in multiple editions of the INOMICS Salary Report.

This is particularly true in North America, the highest-paying region on average. Economists working in industry can earn high wages with only a Master’s degree. This is also true of Western Europe & Scandinavia and East Asia & Australasia, the second and third highest-paying regions identified by the Report.

Some other regions of the world feature much more of a premium for PhD economists. Part of the reason for this is clear. Since high-paying regions like Western Europe and Australasia pay higher salaries to begin with due to the higher cost of living, a high pay increase in these regions represents a lower percentage of overall pay.

This fact is supported by the graph; North America is the highest-paying region and features the lowest positive percentage increase in pay for PhDs. Western Europe, which pays the second most on average, features a slightly higher percentage increase. Readers should make no mistake; a 35.6% increase from a base salary of $100,833 (the average Master’s degree economist salary in North America) is a massive increase in pay. Comparably, the almost 120% increase in pay in the Middle East, Central Asia & North Africa region is an increase from an average Master’s degree salary of $17,321 to almost $40,000. In percentage terms, this is obviously enormous, but in cash terms less than the difference in North America.

Additionally, however, the high percentage premium for PhD economists in lower-paying regions may suggest that in these regions (i.e., South Asia, Middle East) there are more opportunities for economists without a PhD to find meaningful employment, so fewer individuals elect to study for a PhD. If this is true, those who do complete a PhD enjoy a high pay premium over their economist peers since economics PhDs are more rare in those regions.

Academic economists need a PhD

Economics students should keep in mind that academic jobs will almost certainly require a PhD in economics. Economics students interested in a career in academia should therefore be strongly encouraged to pursue an economics PhD, regardless of differences in pay. The following Figure 2 shows the pay premium for economists employed at universities, by region:

Figure 2: Regional Premiums in economics PhD pay compared to a Master’s (Academic only)

The pay premiums for economics PhDs tells the story quite clearly: across the board, in every world region, economics PhDs in academia earn much more than their counterparts without a PhD.

Readers might note that this graph is likely skewed because economics PhDs are probably more senior economists than economists without a PhD in academic settings, and likely hold higher-level positions; but this skewness supports the point. Economists interested in a serious career in academia must strongly consider getting a PhD, or have a specific reason to not need one. It is very difficult to earn a Professor of Economics position without a PhD in most of the world. Figure 3 below provides evidence to support this point.

Figure 3: % of Master’s degree economists in Professor roles by region

Figure 3 shows very clearly that burgeoning economists should expect to earn a PhD if they wish to work as a Professor of Economics in the future. Every world region has very few Professors with just a Master’s degree. Even in South Asia, which has by far the largest representation for Professors with a Master’s degree in our data, only 20% of Professors have a Master’s while 80% have a PhD.

Industry economist roles

It’s clear that academic economists usually need a PhD, but this isn’t necessarily the case in industry. However, readers may be curious to repeat the above breakdowns in industry roles, which can be instructive. Figure 4 thus shows the pay premium for PhD economists in industry roles by region:

Figure 4: Regional Premiums in economics PhD pay compared to a Master’s (Industry only)

Figure 4 shows that PhD economists out-earn Master’s-holding economists in industry jobs by a substantial amount in most regions. The lower industry PhD economist pay compared to Master’s degree economists was already discussed above for Africa and the Caribbean. In summary, Master’s degree holding economists outnumber PhD economists in Government, Central & International Bank, and private business roles in these two regions. Since these three categories of employer tend to pay more highly than others, it may slightly skew the graph in favor of Master’s degree holders. However, this suggests that in these two regions, acquiring a PhD may not be necessary to have a well-compensated industry career.

In North America, part of the reason for a lower than expected premium is likely the fact that in this high-paying region, high base salaries mean that salary increases will be lower percentage-wise. This was discussed above as well. Average years of experience are quite comparable for industry economists in North America (about 12 for Master’s degree holders and 15 for PhD holders), and the employer distribution is relatively balanced.

Figure 4 suggests that industry economists with a Master’s degree in North America ought to consider their career path and whether a PhD is right for them before going back to school. A PhD opens up some employment opportunities in the private sector that aren’t available to Master’s degree holders, and will increase pay, but whether or not that is necessary or desired is likely up to the individual.

Keep in mind that specific non-academic employers – especially governments, central banks like the Federal Reserve, institutions seeking economics researchers, NGOs like the World Bank, and even increasingly consulting firms – are likely to require an econ PhD for some higher-level positions. Be sure to check job listings for economics jobs that you’re interested in to see if a PhD might help you reach them in your career.

Comparing previous years: PhD earnings on the rise again

Using past years of INOMICS survey data, we can examine how the benefit to doing an economics PhD has changed over time. It appears that the premium in pay that economics PhDs enjoy is recovering after a slight dip during the pandemic years. See below Figure 5 below:

Figure 5: How much more PhD economists earn vs. Master’s economists by year, INOMICS data

Figure 5 shows that earnings for economics PhDs are once again rising relative to pay for economists without a PhD. It’s worth noting that pay for economists with both degree types has increased this year. According to the latest INOMICS Salary Report, economists with a Master’s as their highest degree experienced a 3.2% increase in pay on average since 2022, while those with a PhD have experienced a 35.9% increase. This has widened the earnings premium between the two categories from 80% in 2022 to 91% in 2023.

The dip in pay that economists experienced in 2022 may be partially due to the COVID-19 pandemic. And PhD pay is not the only factor that appears to be improving since COVID. The post-pandemic recovery of the economics jobs market has already been discussed by INOMICS, showing that earnings for economists with Master’s and Bachelor’s degrees recovered sharply after the first waves of the pandemic.

So, is doing a PhD in economics right for you? According to the data, in most cases it will be. However, you must weigh the tradeoffs yourself. You may not need a PhD to have a fulfilling career in economics, particularly if you plan to work in a non-governmental and non-central bank role in industry, and particularly in certain countries and regions.

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How Hard is Economics vs. Finance?

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As a major, which one is harder? Econ seems to apply calculus and other types of math. I've never taken a Finance course so I dont have an idea.

is economics a hard major relative to finance?

The answer to this question depends on the school that you attend and the difficulty of the programs at these respective schools.

That being said, from a conceptual standpoint - finance is more technically focused (learning formulas and processes to solve problems) and economics is focused more on theory and critical thinking. With this in mind, most people can memorize their way through a finance class or even degree while economics will require more conceptual studying and critical thinking. On the economics side, calculus also comes into play which is more difficult than the math that you get into on the finance side which is mainly just algebraic equations at the undergrad level.

You can check out a video about the difference between finance and economics below.

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At my non-target, Finance majors are 72 units (tied for most units in a single major). Econ majors are 50 units. Interpret however you will.

I think so. Finance is more statistics and less theoretical. Econ is also more boring in my opinion.

It varies from school to school, at Illinois, it was about the same. Accy was much tougher as a major.

If you are in a non-target program, I would recommend pairing Econ with a quantitative discipline like engineering. Would set you up extremely well for an MFE program.

I am currently a sophomore majoring in Finance with minor in Accounting, however, I am not sure if it will be the best pairing if I am hoping for a career in IB . I am thinking of switching to Finance major/ Econ minor or Econ major/Finance minor but I don't know which one would be more beneficial. Can anyone give advice?

rbholde: I am currently a sophomore majoring in Finance with minor in Accounting, however, I am not sure if it will be the best pairing if I am hoping for a career in IB . I am thinking of switching to Finance major/ Econ minor or Econ major/Finance minor but I don't know which one would be more beneficial. Can anyone give advice?

Most investment banks require several semesters of Accounting classes. I graduated with a major in Finance and a minor in Economics and I regret not picking Accounting.

PigSooie: rbholde: I am currently a sophomore majoring in Finance with minor in Accounting, however, I am not sure if it will be the best pairing if I am hoping for a career in IB . I am thinking of switching to Finance major/ Econ minor or Econ major/Finance minor but I don't know which one would be more beneficial. Can anyone give advice?

???? lol last time i checked IBs dont have course requirements/pre-reqs? Unless maybe you are working in their accounting department?

Harvard doesnt even have accounting for UGs...

IMO, Economics is tougher intellectually and will also teach you how to think. Finance has an extremely narrow focus and most entry-level jobs or internships will teach you the financial skills you need anyway.

I'm biased of course, but I would encourage you to make the most of your educational opportunities.

Tracer: IMO, Economics is tougher intellectually and will also teach you how to think. Finance has an extremely narrow focus and most entry-level jobs or internships will teach you the financial skills you need anyway. I'm biased of course, but I would encourage you to make the most of your educational opportunities.

Agreed. Econ requires critical thinking where as finance requires more memorization of formulas and rules.

I majored in Financial engineering and econ at a target. Fin engineering was way harder than econ, but the normal finance major was a joke.

Upper-level econ can be very tough. I suspect that generally speaking, econ is harder than finance at the grad level.

What kind of Math do you typically do in a finance course?

The math isn't hard in Finance. It's very simple, there are a ton of formulas. Options and Futures can be difficult for some people, but on the whole Finance is not that hard. It all depends though, I've known some people who were majoring in Acct who found Fin to be harder.

I would suggest you take atleast two accounting courses (Intermediate Acct 1&2). These courses will give all the foundation you'll need when doing financial analysis.

For the people that think finance is a joke major, it sounds to me like you're only familiar with basic corporate finance (which is all theory and almost no mathematical application). Once you break into quant finance, especially at the graduate level, it isn't exactly a walk in the park. I would argue that econ theory, at least at the undergraduate level (I can't comment on anything beyond that) certainly isn't what makes it difficult. If you're going to judge finance, don't just look at the easy parts of it. Also, consider that finance is very poorly taught at the undergraduate level in the US.

ucla: For the people that think finance is a joke major, it sounds to me like you're only familiar with basic corporate finance (which is all theory and almost no mathematical application). Once you break into quant finance, especially at the graduate level, it isn't exactly a walk in the park. I would argue that econ theory, at least at the undergraduate level (I can't comment on anything beyond that) certainly isn't what makes it difficult. If you're going to judge finance, don't just look at the easy parts of it. Also, consider that finance is very poorly taught at the undergraduate level in the US.

The math I did in Industrial Organization and Econometrics is way more complicated than anything I did in an upper level portfolio management course and certainly far more complex than anything I did in IBD . M&A finance as practiced in the real world doesn't get any more complicated than the 4 basic arithmetic functions and the occasional exponent.

Grad-level Econ certainly isn't navelgazing either. There's plenty of statistical analysis in grad level economics as well and a lot of the more complex formulas and tools for analysis in quant finance were developed or are also used by economists, e.g. Black and Scholes were both economists.

Tracer: ucla: For the people that think finance is a joke major, it sounds to me like you're only familiar with basic corporate finance (which is all theory and almost no mathematical application). Once you break into quant finance, especially at the graduate level, it isn't exactly a walk in the park. I would argue that econ theory, at least at the undergraduate level (I can't comment on anything beyond that) certainly isn't what makes it difficult. If you're going to judge finance, don't just look at the easy parts of it. Also, consider that finance is very poorly taught at the undergraduate level in the US.

Luckily my answer isn't confined to purely graduate level finance or econ, which is why it is relevant.

Upper level portfolio management is a joke, how can you compare that to an econometrics course? Get real. Regarding M&A finance, there is a reason bankers are known as monkeys. Again, if you're only going to compare the difficult economics to the easy finance, you're going to bias your answer and give shit advice.

ucla: Tracer: ucla: For the people that think finance is a joke major, it sounds to me like you're only familiar with basic corporate finance (which is all theory and almost no mathematical application). Once you break into quant finance, especially at the graduate level, it isn't exactly a walk in the park. I would argue that econ theory, at least at the undergraduate level (I can't comment on anything beyond that) certainly isn't what makes it difficult. If you're going to judge finance, don't just look at the easy parts of it. Also, consider that finance is very poorly taught at the undergraduate level in the US.

Luckily my answer isn't confined to purely graduate level finance or econ, hence why it's relevant.

Portfolio Management was a 300 level course during undergrad, as were Industrial Organization and Econometrics. We had a really good prof in PM who actually took us through the mathematical derivations of every single formula, including B-S, CAPM , etc.. It was as sophisticated as you could get at the undergrad level, IMO.

I didn't go to Wharton, but looking at the course listings here: http://fnce.wharton.upenn.edu/programs/undergrad_courses.cfm

--and assuming Wharton has a pretty good undergrad finance program, it seems pretty clear to me that ignoring the economics masquerading as finance courses, that PM is as complicated as it gets in undergrad finance. I'm also confident that any econ major w/ no college finance coursework who worked in M&A or Lev Fin for 2 years could sit and pass the final exams in every single course on that page.

As they are currently taught, undergrad econ is definitely harder than undergrad finance.

If the guy wants to be a banker, he might as well take econ and challenge himself and then drop $150 or whatever on the BIWS beginner's modeling course which will teach him all the finance he needs on the job. There's no point dropping thousands of dollars on an undergrad finance education when you can cover the b professionally relevant[/b] material for much less in your spare time.

I genuinely think that it depends on the person. For me, economics was incredibly easy. I'm majoring in finance, but have taken at least six or seven economics classes, and at no point did I find it difficult. To me it was just a lot of what I assumed was common sense. Finance on the other hand was just so vast it was difficult to nail down. Accounting, future cash flows, several different ways to valuate a firm, options and futures markets, foreign currencies and markets, cash flow statements, tons of statistical formulas, etc. I'm not saying economics is easy, but again, I think it depends on the person, and how well they grasp certain material.

Finance and accounting are not difficult or really all that challenging in terms of intellectual rigor, they are more or less memorization of and understanding basic formulas (algebra mostly). Econ has a more calculus applications at the undergrad level and is definitely more of a thinking mans major.

Think I'll go with Finance. The math for Econ is scaring me lol.

I was an econ major and i had a bunch of friends that were finance majors. From what ive seen from their work in comparison with mine, I can say that econ requires more intuitive thinking, while finance is more linear. Interpret that however you like lol.

Econ is definitely much more intellectually rigorous. It requires deeper thinking and thorough understanding of complex material, and then applying that material to novel situations. On the other hand, finance is linear and straight-forward; memorization of a few formulas and basic mathematical skills suffice.

Put it like this. Econ is qualitative with a few key quantitative aspects, while finance is rote and repetitive, quantitative in every way. The proponents of each will say theirs is more challenging.

A Posse Ad Esse: Put it like this. Econ is qualitative with a few key quantitative aspects, while finance is rote and repetitive, quantitative in every way. The proponents of each will say theirs is more challenging.

Bull fucking shit. Utterly incorrect.

Taison: A Posse Ad Esse: Put it like this. Econ is qualitative with a few key quantitative aspects, while finance is rote and repetitive, quantitative in every way. The proponents of each will say theirs is more challenging.

uhhh no. your statement couldnt be further from the truth. (no offense)

The "all of 5 minutes" argument seems to span entire internships and several months into full-time, so I don't buy it.

There is a difference between getting into IB (and getting by in IB) versus crushing IB . And what do you think happens when you interview for buyside , where your ability to get by off of bullshit is largely diminished and you're expected to actually know what you're doing and understand why youre doing it?

Im sure there are a ton of liberal art people who did HBS who are crushing wall street. Last time I checked, HBS is a business school which teaches finance. Liberal arts kids aren't idiots (a persons major has no bearing on their intelligence), but having an additional edge when it comes to knowledge can only help. Why do you think these guys needed to go back to get their MBA ?

Are you still in college or have you just not updated your profile from Prospective IB?

I've done IB for 2.5 years. I know what needs to be known at this point. I was a triple major in college (Econ was one of them, no option for finance). The finance you need to know to do well in an IB non-trading/quant job is so incredibly limited that you can pick it up over a weekend if you're not clueless.

Seriously, if finance were so vital to success in IB , Ivies and other top 20 schools (excepting Wharton, I suppose) would actually offer it as a major.

I read through Wharton's complete undergrad offering. With the exception of some of the super niche topics, I am confident I could sit for finals in every one of those classes and pass them.

And for the record, HBS is not a finance-heavy school. The finance your typical student learns there is just a condensed version of undergrad finance for career-switchers looking to go into finance.

I have not updated my profile.

First off, I find finance, from an academic perspective, to be extremely interesting. This isn't a field that only offers value because it prepares you for IBD .

You mentioned that you can learn everything you need to in a weekend -- that may be true (probably not), but again, having additional knowledge going into a job can only help. When I interned back in the day, there was a very clear difference between the kids who had taken finance in school and those who had not. The difference did not disappear, even by the end of the internship. Had the gap closed? Sure, but it still existed. Good luck hitting the ground running in a field like restructuring if you've never taken a finance course.

Also, I never said HBS was a finance heavy school. I am quite aware that it is not (whereas Chicago and Wharton are), but it does give a liberal art major a strong intro into finance which is certainly helpful.

On a final note, I absolutely guarantee you would get crushed on anything related to options/futures. Good luck knowing the risk neutral / no arb methods with your IB background. The only things you would easily pass are the things pertaining to corporate finance and valuation . There is a whole lot more to finance than that, which goes back to my initial point. Lets not forget, this entire discussion isn't even relevant to the OP's question.

No one said finance wasn't interesting, well not me anyway. And no one said it was a narrow field as a whole, we're talking undergrad.

As this thread is in the IB forum, it's clearly being started by a kid who wants to do banking some day, so advanced option pricing formulae are irrelevant to his professional goals.

I think it's worth noting that any supposed material advantage a finance major has over an econ major in job performance in IB is limited only to the first few months/years of their careers. After that point, the econ majors catch up in terms of their financial knowledge, and rigorous financial analysis ceases to be part of their job responsibilities. As their careers progress, the econ majors will be better served by the critical thinking skills and fundamental understanding of markets that they learned back as an undergrad. Many of the biggest and most innovative professionals in banking and PE history were econ majors and never studied finance in depth.

Ok to back this argument up slightly...

We started off discussing which major is "harder" (not better). I don't particularly have a strong stance on this because I think the question is incredibly vague. What does "harder" even really mean? In our guts, we feel subjects like sociology/history are easier than mathematics/physics, but it is still quite subjective. Moving away from extremes, we are now looking at econ /finance which are two very closely related fields, and trying to say which is "harder". This makes our discussion incredibly subjective to the point where there isn't a right answer (given the lack of definition of harder, many people are on different pages). At this point, I wanted to correct the fact that the narrow view of corporate finance that you have is NOT representative of "finance" at large in an undergraduate academic setting. Therefore, you pointing out that "finance is easier than econ because you can learn corporate finance in a few days in banking" is a bullshit argument as far as I am concerned (and it is obvious where your bias is...how would you even realize how little you know about the topic unless you've majored in it? I don't know for certain what you majored in, but given your arguments, I highly doubt it is finance).

Now, we've moved away from the argument of which is harder to which is better. Again, this is undefined, but to me, "better" is the subject that will better prepare you for banking (specifically, your analyst stint as that is what is most relevant to prospective students). In my mind, from the perspective of which subject gives you the knowledge to succeed, finance is unequivocally the better major.

We are clashing here because you think "better" isn't what gives you knowledge to begin with, but rather what helps you succeed in the longer run (this is still within the definition of "what will better prepare you for banking" but with a bit more of a distinction between the short/long term). You have the idea that economics teaches you how to critically think in a superior fashion to finance. Overall, this means you're going to give econ more credit in the long run than I would (and finance less credit in the short term because you think the gap is eliminated more quickly than I do).

I don't think your argument holds much weight. We can both agree that finance provides superior "short term" (how short short-term is is certainly subjective, and I think it's longer than you think) knowledge, but we do not both agree about the critical thinking comment. I do not accept your statement that econ teaches you to critically think in a "superior" fashion to finance. My gut tells me that math/philosophy are the only two majors that truly teach you how to critically think, with any sort of applied math subjects being a slightly watered down version of mathematics from a critical thinking perspective (physics, engineering, etc.). Econ/finance are pretty comparable from the math perspective at the undergraduate level, assuming you're comparing quant finance to the more quant fields in econ (like econometrics, which you are). Therefore, I don't think you can objectively state that either subject is superior.

One last thing to note: given the recruiting process for the analyst stint into PE / HF , unless that gap is eliminated extremely quickly (which it really isn't), there will be an advantage to the Wharton kid who already has his shit mastered and can focus on the new stuff. I mean, how much easier is it to understand the mechanics behind a deal when you already know all the quant stuff? How much easier is it to discuss distressed debt opportunities or whatever niche field you're looking at when you've already spent a few semesters studying the theory behind these sorts of events?

TLDR: corp finance (qualitative finance) cannot be compared to econometrics (arguably the most quant portion of undergrad econ). Also, while "better" is subjective, we can both agree finance teaches you more to begin banking but we are at an impasse regarding which teaches you to better think "critically". This is because you are not providing anything to substantiate your comments. Am I supposed to take you at your word that econ is better for critical thinking? Come on now.

based on the unscientific sample below, it would seem that being an econ major puts you at no disadvantage to success in finance over the long term...

Famous Econ Majors:

Bob Diamond http://en.wikipedia.org/wiki/Robert_Diamond

Ken Griffin http://en.wikipedia.org/wiki/Kenneth_C._Griffin

David Tepper http://en.wikipedia.org/wiki/David_Tepper

Steven Cohen http://en.wikipedia.org/wiki/Steven_A._Cohen

Henry Kravis: http://en.wikipedia.org/wiki/Henry_Kravis

Robert Rubin http://en.wikipedia.org/wiki/Robert_Rubin

Jamie Dimon http://en.wikipedia.org/wiki/Jamie_Dimon

Paul Tudor Jones http://en.wikipedia.org/wiki/Paul_Tudor_Jones

Famous Finance Majors:

John Paulson http://en.wikipedia.org/wiki/John_Paulson

Famous English Majors:

Hnery Paulson http://en.wikipedia.org/wiki/Henry_Paulson

+1 for liberal arts...

deal_mkr: based on the unscientific sample below, it would seem that being an econ major puts you at no disadvantage to success in finance over the long term... Famous Econ Majors: Bob Diamond http://en.wikipedia.org/wiki/Robert_Diamond Ken Griffin http://en.wikipedia.org/wiki/Kenneth_C._Griffin David Tepper http://en.wikipedia.org/wiki/David_Tepper Steven Cohen http://en.wikipedia.org/wiki/Steven_A._Cohen Henry Kravis: http://en.wikipedia.org/wiki/Henry_Kravis Robert Rubin http://en.wikipedia.org/wiki/Robert_Rubin Jamie Dimon http://en.wikipedia.org/wiki/Jamie_Dimon Paul Tudor Jones http://en.wikipedia.org/wiki/Paul_Tudor_Jones Famous Finance Majors: John Paulson http://en.wikipedia.org/wiki/John_Paulson Famous English Majors: Hnery Paulson http://en.wikipedia.org/wiki/Henry_Paulson +1 for liberal arts...

Totally forgot Warren Buffett, Econ at UPENN.

Why are they more adaptable and capable? Are people who receive a top-class education in finance not encouraged to think creatively or outside of the box? Econ majors are encouraged to be critical thinkers and finance majors are encouraged to be drones? How is taking a finance major "short sighted towards IBD /PE"? Do you have anything to substantiate your claim other than your opinion?

If nothing else (I assume you won't bother to back up half the shit you've said, because it's opinionated unsubstantiated bullshit), please provide real evidence on how economics is an "education" more than finance. What is it exactly that you think Ben Graham taught? His students were..drones? Incapable of critical thought relative to the average economics student?

A lot of bold claims that you can't back up / substantiate in any way.

As a side note, I find it hilarious that you're comparing math/physics/philosophy with economics. Clearly an econ major haha.

Uhh, Buffett switched schools and graduated from the University of Nebraska. :)

IlliniProgrammer: Uhh, Buffett switched schools and graduated from the University of Nebraska. :)

Score one for the Midwest ha Illini?

If you really want a great thinking education do philosophy. It might not help you in the short term but it will improve your logical thinking, intuition, etc. and that can only help you. Consider finance or economics plus philosophy if you think you can maintain good grades and stuff. One of my regrets in college was not doing philosophy

bIastoise: If you really want a great thinking education do philosophy. It might not help you in the short term but it will improve your logical thinking, intuition, etc. and that can only help you. Consider finance or economics plus philosophy if you think you can maintain good grades and stuff. One of my regrets in college was not doing philosophy

This. If I didn't have to worry about coming from a non-target as is, I would absolutely do a philosophy degree. Well, probably some sort of joint degree philosophy/finance or phil/econ or something similar. Would have loved to do phil/math, but that would've most likely resulted in a sub-3.0 gpa.

UCLA is an econ major at USC.

Such passion............

yeah philosophy/math would've been great... I definitely feel I threw away my education with econ/finance but unfortunately I wouldn't have been able to get a job without it. As far as I'm concerned though, you can pick up a lot of this stuff yourself if you make an effort to go out there and read as much as you can. Reading 24/7 and being self motivated are pretty key.

All the comments thus far have been extremely helpful. If I finish undergrad with a 3.8, which major would likely get me into the better grad school? Econ or Finance?

rbholde: All the comments thus far have been extremely helpful. If I finish undergrad with a 3.8, which major would likely get me into the better grad school? Econ or Finance?

I think we all agree that majoring in finance better prepares one for IB in the immediate short-term, i.e. two to three months. I concede that finance majors will hit the ground running while non-finance majors will expect to devote more time to broadening their knowledge of finance in the initial months on the job. Therefore, if you want to make significant contributions during the first few months of your stint--or at least the chance of doing something meaningful--then choose to major in finance.

Any competent individual, which we can expect as commonplace in IB , should have a command of mostly everything he needs to know for an IB stint, irrespective of his major, within two to three months after starting the job. Let's not forget the on-site training incoming analysts receive--training that BBs pay thousands of dollars for. Further, many incoming analysts--probably safe to say the majority--have previously interned in at least one if not more financial roles, if not IBD itself.

I think most of us also agree that undergraduate economics requires considerably more critical thinking than undergraduate finance, generally speaking. I'm not saying finance doesn't require critical thinking, but rather not nearly to the degree of economics. Finance essentially boils down to crunching numbers and applied mathematical concepts. The material itself is straight-forward and relatively easy to wrap your head around. Economics also involves crunching numbers and applied mathematical concepts, but intertwines these components with deep-level thinking and complex scenarios that are extremely difficult to wrap your head around. Quite frankly, finance provides you with a set of formulae and a set of numbers, and it's your job to plug in and solve. On the other hand, economics poses intellectually rigorous situations which you must thoroughly understand before you can even start thinking about numbers and formulae. Thus, economics students are generally well-versed in both critical thinking and quantitative concepts, while finance students are generally skewed towards the latter.

Put simply, if you want to forfeit critical thinking and complex reasoning skills that will prove essential later in your life for a short-term benefit in your IBD analyst stint, major in finance. Otherwise, choose economics. Alternatively, you could major in Financial Economics like me :)

econometrics fucks everything you do at undergrad finance in the ass. in so many ways.

It's all relative to the school and how the courses are taught. Every program has different requirements.

There are econ majors that don't require econometrics or any math past calc 2 for that matter. Some undergrad finance programs require advanced statistics and stochastic calculus.

Again, it would be nice if the people stating econ takes more critical thinking could actually provide some evidence rather than just broadly making such a bs claim. The burden of proof falls upon the claimant. Finance is more than just memorizing a few formulas and applying a few numbers (there aren't complex scenarios in finance? ..really?), what an idiotic comment. I legit don't know what sort of education you guys received to come to this conclusion. I doubt anyone from Wharton would agree.

I found both finance and economics to be quite similar regarding the degree of problem solving required, though there was a difference with the type of skill needed to do well. From my experience, the average finance course was more dependent on accounting/strategy whereas the average econ course was more dependent on math/clever thinking (variance between micro/macro though, with micro being largely math based and macro being more theoretical/high level thinking). Yes, econ definitely requires you to think outside of the box and be clever, but I think people are underestimating the strategy component in finance (strategy is, almost by definition, solely focused on critical thinking and problem solving). Furthermore, once you get into finance fields like distressed investing, you're combining finance with accounting, law, strategy, game theory, etc. These fields are extremely far from "simple" and my distressed debt class was probably the hardest I took in undergrad (other than advanced econometrics and advanced derivatives).

ucla: Again, it would be nice if the people stating econ takes more critical thinking could actually provide some evidence rather than just broadly making such a bs claim. The burden of proof falls upon the claimant. Finance is more than just memorizing a few formulas and applying a few numbers (there aren't complex scenarios in finance? ..really?), what an idiotic comment. I legit don't know what sort of education you guys received to come to this conclusion. I doubt anyone from Wharton would agree. I found both finance and economics to be quite similar regarding the degree of problem solving required, though there was a difference with the type of skill needed to do well. From my experience, the average finance course was more dependent on accounting/strategy whereas the average econ course was more dependent on math/clever thinking (variance between micro/macro though, with micro being largely math based and macro being more theoretical/high level thinking). Yes, econ definitely requires you to think outside of the box and be clever, but I think people are underestimating the strategy component in finance (strategy is, almost by definition, solely focused on critical thinking and problem solving). Furthermore, once you get into finance fields like distressed investing, you're combining finance with accounting, law, strategy, game theory, etc. These fields are extremely far from "simple" and my distressed debt class was probably the hardest I took in undergrad (other than advanced econometrics and advanced derivatives).

lol so dumb. Finance courses are purely rote memorization. Mentioning accounting as an example of something finance incorporates in an attempt to boost up the amount of critical thinking required is just laughable.

Econ taught at an respectable school, like all liberal arts majors, involves real problem solving (not just memorizing how to do a DCF), high levels of knowledge in math and statistics, etc. Finance at even the best schools involves what amounts to math that can be done on a 4-function calculator and rote memorization of some basic ideas. The fact that in the matter of a few months you can learn most of what you would learn in a finance undergraduate degree shows how much of what is involved really is just memorization and repetition. On the other hand, it would take much longer to master linear algebra, statistics, econometrics, etc. let alone be able to apply them significantly to even basic theoretical issues touched upon in a micro 201 course.

Taison: ucla: Again, it would be nice if the people stating econ takes more critical thinking could actually provide some evidence rather than just broadly making such a bs claim. The burden of proof falls upon the claimant. Finance is more than just memorizing a few formulas and applying a few numbers (there aren't complex scenarios in finance? ..really?), what an idiotic comment. I legit don't know what sort of education you guys received to come to this conclusion. I doubt anyone from Wharton would agree. I found both finance and economics to be quite similar regarding the degree of problem solving required, though there was a difference with the type of skill needed to do well. From my experience, the average finance course was more dependent on accounting/strategy whereas the average econ course was more dependent on math/clever thinking (variance between micro/macro though, with micro being largely math based and macro being more theoretical/high level thinking). Yes, econ definitely requires you to think outside of the box and be clever, but I think people are underestimating the strategy component in finance (strategy is, almost by definition, solely focused on critical thinking and problem solving). Furthermore, once you get into finance fields like distressed investing, you're combining finance with accounting, law, strategy, game theory, etc. These fields are extremely far from "simple" and my distressed debt class was probably the hardest I took in undergrad (other than advanced econometrics and advanced derivatives).

lol so dumb. The fact that in the matter of a few months on a rates/fx trading desk, you can learn most of what you would learn in an economics undergraduate degree shows how much of what is involved really is just basic understanding of economic processes and simple algebra.

I sound just as ridiculous as you did.

How about double major in economics and finance with a minor in accounting?

I never said that the accounting component of accounting required critical thinking -- don't put incorrect words in my mouth. Re-read what I wrote and try again. Apparently economics requires critical thinking but not reading comprehension?

The math required for finance can easily go beyond a 4-function calculator. Linear algebra/statistics are SO hard to master...lol give me a break, plus those were required for finance (at my school at least). You don't know what you're talking about and I'm going to end my discussion there.

What's with all these liberal arts people assuming that having a liberal arts degree automatically means that you are a "critical-thinker" and all those other buzzwords thrown around? I'm not hating on them since I have a lot of respect for math PHDs and whatnot, but assuming that a finance major is incapable of higher thinking just because of degree choice is as short-sighted as me assuming that all these philosophy and economics kids have no "concrete" or "application" skills and are just bogged down in theoretical models.

A degree doesn't define you as a person and honestly, its up to the individual to decide what his or her education is/what they want to learn. For example, I'm a finance major but I regularly read about economic theories on my own and am planning on reading philosophy since I've developed an interest in it. Will I be as intelligent about philosophy as a guy who has studied it for 4 years full-time? Probably not, but I can still get a good sense of how the world books because I choose to pursue this education on my own. Intellectual curiosity isn't something spoon-fed to you from a teacher; its something that comes from within. Sorry for ranting but my point is a degree doesn't teach you any of these long-term traits a lot of the liberal arts kids are claiming, in my opinion. I think that a person determines how one's education defines his or her life.

Al Bundy: What's with all these liberal arts people assuming that having a liberal arts degree automatically means that you are a "critical-thinker" and all those other buzzwords thrown around? I'm not hating on them since I have a lot of respect for math PHDs and whatnot, but assuming that a finance major is incapable of higher thinking just because of degree choice is as short-sighted as me assuming that all these philosophy and economics kids have no "concrete" or "application" skills and are just bogged down in theoretical models. A degree doesn't define you as a person and honestly, its up to the individual to decide what his or her education is/what they want to learn. For example, I'm a finance major but I regularly read about economic theories on my own and am planning on reading philosophy since I've developed an interest in it. Will I be as intelligent about philosophy as a guy who has studied it for 4 years full-time? Probably not, but I can still get a good sense of how the world books because I choose to pursue this education on my own. Intellectual curiosity isn't something spoon-fed to you from a teacher; its something that comes from within. Sorry for ranting but my point is a degree doesn't teach you any of these long-term traits a lot of the liberal arts kids are claiming, in my opinion. I think that a person determines how one's education defines his or her life.

Lots of people studying liberal arts are pseudo intellectual retards anyway whose actual intellect is highly limited and who would have gotten destroyed in a hard subject(maths, physics, econometrics etc...) and then try to cover up their immense deficits by deluding themselves into believing they are intellectual because they read some Hobbs or Hume as part of their course.

With lots of philosophy/politics majors once you start leaving their curriculum in discussions and enter topics which require their own independent thought you will quickly realize that they are actually total idiots.

Also you can throw knowledge at idiots and they will still be idiots, as you said intellectual curiosity is not fed to you by a teacher.

leveredarb: Al Bundy: What's with all these liberal arts people assuming that having a liberal arts degree automatically means that you are a "critical-thinker" and all those other buzzwords thrown around? I'm not hating on them since I have a lot of respect for math PHDs and whatnot, but assuming that a finance major is incapable of higher thinking just because of degree choice is as short-sighted as me assuming that all these philosophy and economics kids have no "concrete" or "application" skills and are just bogged down in theoretical models. A degree doesn't define you as a person and honestly, its up to the individual to decide what his or her education is/what they want to learn. For example, I'm a finance major but I regularly read about economic theories on my own and am planning on reading philosophy since I've developed an interest in it. Will I be as intelligent about philosophy as a guy who has studied it for 4 years full-time? Probably not, but I can still get a good sense of how the world books because I choose to pursue this education on my own. Intellectual curiosity isn't something spoon-fed to you from a teacher; its something that comes from within. Sorry for ranting but my point is a degree doesn't teach you any of these long-term traits a lot of the liberal arts kids are claiming, in my opinion. I think that a person determines how one's education defines his or her life.

There are NOT high math/physics/chemistry requirements for the typical liberal arts major. Sociology, psychology, history, languages, etc...please.

I am sorry you study sociology taison.

leveredarb: I am sorry you study sociology taison.

Sorry you didn't study English, bro.

This doesn't answer the OP's question at all, but consider this: hot chick with brains asks: what did you study, what do you do? you answer a) finance/finance, or b) history/finance

This is almost an impossible question to answer because it entirely depends on the school you attend but I will say, as an Econ major, I wish I had the option be a Finance major (they don't have it at my school) even though I think that Econ allows you to field a wider array of job oppurtunities out of college as its a more versatile study

rjcip331: This is almost an impossible question to answer because it entirely depends on the school you attend but I will say, as an Econ major, I wish I had the option be a Finance major (they don't have it at my school) even though I think that Econ allows you to field a wider array of job oppurtunities out of college as its a more versatile study

Correct me if I'm wrong, but aren't there a lot of jobs in industry that are closed to econ majors on the flip side? For example, when I was looking at a lot of F500s to apply to, a lot of them restricted finance/accounting majors in terms of who could even apply. I know these jobs aren't "prestigious" and that econ has stuff like econ consulting/gov jobs that are closed to finance majors, but I feel like they'd be relatively even overall. I think it just depends on if you want to do a more research-oriented capacity, or go straight to industry. When you look at what the two degrees emphasize, then its obvious as to why this is the case. I think that's why this discussion is turning into a dick measuring contest quickly (although, it IS wso , so that's to be expected) since it depends on whether you enjoy learning/want to go into a more theoretical/research role, versus want to learn skills that can be more readily applied to your job and prefer a more hands on job. It really is personal preference, so I dunno why some of the back and forths are so heated as there is no right or wrong answer.

im definitely a proponent of the liberal arts but to say that economics requires much more critical thinking than finance seems to be too one-sided. I'm sure asking questions about efficient markets (e.g. are the markets efficient?), the equity premium puzzle (why do equities substantially outperform fixed income securities even adjusting for risk?), black scholes improvements, etc. aren't easy. if you go to wharton or sloan, i'm pretty sure you'll exercise your mental muscles as a finance major (full disclosure: economics major, didn't major in finance at my school)

ToughStreet: As a major, which one is harder? Econ seems to apply calculus and other types of math. I've never taken a Finance course so I dont have an idea.

Nothing is harder if you comprehend the philosophy of subject. Focus only on what you want to achieve. I think economics is a discipline that studies trade across all similar and dissimilar markets. It’s a social science that deals with concepts like price and demand. On the other hand, finance is a subset of economics that studies the financial markets. The financial market is a market that brings together borrowers and lenders to allow them to trade. It can also be called a fund management science that deals with how the funds are allocated or arranged for in a institution. Do yourself a favor and do like I did, go to the website Oil Trading Academy, the secret code is real I can tell you that, it really is controlled by a computer, just like they say, it's just amazing!"

To the OP, yes. I double majored in finance and econ.

Econ is WAAAAAAAAAAAY more difficult once you get into econometrics and myriad of regression types.

At the introductory level they're both jokes, though.

Cries: To the OP, yes. I double majored in finance and econ. Econ is WAAAAAAAAAAAY more difficult once you get into econometrics and myriad of regression types. At the introductory level they're both jokes, though.

So you're saying that one class alone made economics harder than finance? At least for me, econometrics was the only course that used anything but least-squares. Also, a myriad seems to be a bit of an exaggeration. What could you have possibly used outside of Bayesian, nonparametric and least absolute value?

Unless you're referring to courses above the undergrad level, I just don't think there's any merit in what you're saying.

How about completing a Dectuple major in mathematics, statistics, economics, finance, accounting, classics, philosophy, history, political science, and Chinese?

lol why don't u take one of each and decide?

"Hey smarty pants. Political & science is a double major, so you listed eleven."

-Sarah Palin, Miss Alaska runner-up.

IlliniProgrammer: "Hey smarty pants. Political & science is a double major, so you listed eleven." -Sarah Palin, Miss Alaska runner-up.

Honestly, a missing comma? I am sorry you have too much time on your hands.

lol, doesn't matter what you major in, as long as it challenges you to become a better problem solver, a better team player, and a better leader.

stick to one major and use the extra time to do real challenges (research, entrepreneurship, writing something that's actually good, become a good salesman). no point in being able to read some theory someone else came up with, lol, anyone can read someone else's work.

and in regards to IBD , technical skills aren't what really make it rain in IBD .

couchy: lol, doesn't matter what you major in, as long as it challenges you to become a better problem solver, a better team player, and a better leader.

leveredarb: couchy: lol, doesn't matter what you major in, as long as it challenges you to become a better problem solver , a better team player, and a better leader.

I actually study pure math lol. But I mentor a lot of kids, participate in a lot of school team competitions, do research, and had a great mentor myself

Nothing is harder if you comprehend the philosophy of subject. Focus only on what you want to achieve. I think economics is a discipline that studies trade across all similar and dissimilar markets. It’s a social science that deals with concepts like price and demand. On the other hand, finance is a subset of economics that studies the financial markets . The financial market is a market that brings together borrowers and lenders to allow them to trade. It can also be called a fund management science that deals with how the funds are allocated or arranged for in an institution. Blue horseshoe loves Oil Trading Academy, don't miss this once in a lifetime opportunity, a gift horse in the mouth compliments of the 33rd Degree Masons

For an undergraduate degree, I would say that economics is more difficult. A finance undergrad will touch on many topics within finance, but not go overly in depth into any. Basic fixed income, options, and security analysis courses are more a test of memorization. An econ undergrad can be similar in terms of difficulty with potential for large breadth in coursework (trade, public, macro, micro, etc.), but can also become more "difficult" (read: mathematical) at the advanced undergrad levels of macro, micro, and econometrics. That being said, "difficulty" will vary largely by institution, and neither are very difficult when looking across the spectrum of undergraduate major possibilities.

philgorman: For an undergraduate degree, I would say that economics is more difficult. A finance undergrad will touch on many topics within finance, but not go overly in depth into any. Basic fixed income , options, and security analysis courses are more a test of memorization. An econ undergrad can be similar in terms of difficulty with potential for large breadth in coursework (trade, public, macro, micro, etc.), but can also become more "difficult" (read: mathematical) at the advanced undergrad levels of macro, micro, and econometrics. That being said, "difficulty" will vary largely by institution, and neither are very difficult when looking across the spectrum of undergraduate major possibilities.

Graduate study in Quant Finance tends to be much more difficult than Grad study in Economics. Quant Finance is mostly Math/Statistics/Programming applied to the financial realm. One way to look at it is the market demand - a lot of HFs wouldn't hire a Econ Phd when looking for a trading signal researcher - they'd want some with a more 'hardcore' background.

just saw this post. no offense, but the kids in my finance program, (which is in the top 25 business programs in the country), have ZERO intuitive understanding of whats going on, or why its going on---what I mean by that is they don't understand the impact of political regulations, international affairs, currency exchange rate fluctuations, or the underlying reasons for the trajectory of industries during fluctuations in the cyclical economy---let alone how to predict those fluctuation before they happen! Let's put it this way---im a senior in college in SENIOR (400+) level finance courses and my classmates don't know what QE3 is or why it had tremendous ramifications on the market.

I started as an Econ major and am currently tripling in Econ, International Business, and Finance, and minoring in math. All i'll say is if you have the capacity to understand and interpret numbers with respect to the economy and do the EXTREMELY ADVANCE LEVEL of calculus required in economics (not just econometrics---anyone who's in a top ranked program knows that even intermediate micro theory requires a background in calc 1,2,and 3, and the ability to tackle differential equations and do both linear and non linear algebra quickly and w/out a calculator (i was never allowed even the most basic of calculators)) can with out question do finance. it is essentially watered down Economics.

The CAPM , and many correlation canceling formulas used in finance were derived by economists. In my experience it is MUCH more challenging, draws upon a MUCH more intelligent pool of students, and if coupled with a desire to work in finance it will provide u with the knowledge to make much more money in the IB world. The issue is some people studying econ are not focused on investments, but generally speaking, that segment that of econ majors interested in finance will make a LOT more $ than those with a strictly finance background. those studying econ understand the impact of everything going on in the world, and can turn the most ridiculous pieces of knowledge into a source of tremendous income.

Derivatives and Options Markets also trace back to the Economists.

"st saw this post. no offense, but the kids in my finance program, (which is in the top 25 business programs in the country),"

Top 25 finance? What is that, university of idaho of miami? Only the top 5 ugrad finance programs are worth commenting on. It's like being #1 in Entrepreneurship, who cares?

.....I said within the top 25. Not #25. I wasn't going to say something like "within the top 16", as it would then be ridiculously obviously which school I attended. I'm also not going to lie....it's isn't a top 5 program, however it definitely has a business school with name recognition. For example, Cornell's Buisness School is ranked #13, not top 5, but people would definitely assume you got a top grade education there.

Look, I have no reason to be biased. I am majoring in both. I have friends in both majors. I love my professors in both majors. I plan to work in finance. However, I am objectively saying the difference in intensity is apparent. And most of my friends in the finance program acknowledge that.

For my sophomore year micro class (NOT even the advanced micro theory course) I needed to have completed all 3 calculus class. Before taking the end of the Econ curriculum we are expected to have taken an introductory course in nonlinear dynamical phenomena to approach advanced optimization problems. The finance curriculum doesn't even touch that level of rigor. Maybe at your university you had a different experience, but where I attend school the two are really not comparable at all.

NYCGALPAL: .....I said within the top 25. Not #25. I wasn't going to say something like "within the top 16", as it would then be ridiculously obviously which school I attended. I'm also not going to lie....it's isn't a top 5 program, however it definitely has a business school with name recognition. For example, Cornell's Buisness School is ranked #13, not top 5, but people would definitely assume you got a top grade education there. Look, I have no reason to be biased. I am majoring in both. I have friends in both majors. I love my professors in both majors. I plan to work in finance. However, I am objectively saying the difference in intensity is apparent. And most of my friends in the finance program acknowledge that. For my sophomore year micro class (NOT even the advanced micro theory course) I needed to have completed all 3 calculus class. Before taking the end of the Econ curriculum we are expected to have taken an introductory course in nonlinear dynamical phenomena to approach advanced optimization problems. The finance curriculum doesn't even touch that level of rigor. Maybe at your university you had a different experience, but where I attend school the two are really not comparable at all.

This is also Finance - http://statistics.stanford.edu/~ckirby/techreports/GEN/2009/2009-08.pdf

Just saying.

Just saying. Making blanket statements is bad.

Yeah it totally depends on the school but Finance at every top 5 ugrad bschool > econ at those same schools.

Wharton Finance > Upenn CAS Econ (just look at how badly brady/jjc got pwned, lol)
Stern Finance > NYU CAS Econ
Haas Finance > reg softball Berkeley econ
Ross Finance > LSA econ at Umich etc.etc.etc.

Press0: Yeah it totally depends on the school but Finance at every top 5 ugrad bschool > econ at those same schools. Wharton Finance > Upenn CAS Econ (just look at how badly brady/jjc got pwned, lol) Stern Finance > NYU CAS Econ Haas Finance > reg softball Berkeley econ Ross Finance > LSA econ at Umich etc.etc.etc.

You really do not understand the thrust of this conversation. It is about which is more difficult , which is more rigorous, which is more mentally exhausting...

In finance, the toughest course would probably be Options/ Futures or quantitative finance , which, may or may not be offered at some schools. From what I have heard, econometrics is very tough.

I can speak for Haas and Berkeley econ since I'm doing simultaneous degrees in both. Your comment made me laugh. In terms of prestige, yes Haas is better. In terms of actual difficulty, the econ classes actually tend to be harder than Haas classes (both in material and grading curves). It's anything but "softball"

It's impossible to say which major is more difficult, its dependent on which courses you take. I can take the core econ courseload at any decent school and load the extra's up with history classes. In the grand scheme of things, who the hell cares.

In terms of difficulty, IMO macro econ > finance > micro econ

NYCGALPAL: just saw this post. no offense, but the kids in my finance program, (which is in the top 25 business programs in the country), have ZERO intuitive understanding of whats going on, or why its going on---what I mean by that is they don't understand the impact of political regulations, international affairs, currency exchange rate fluctuations, or the underlying reasons for the trajectory of industries during fluctuations in the cyclical economy ---let alone how to predict those fluctuation before they happen! Let's put it this way---im a senior in college in SENIOR (400+) level finance courses and my classmates don't know what QE3 is or why it had tremendous ramifications on the market. I started as an Econ major and am currently tripling in Econ, International Business, and Finance, and minoring in math. All i'll say is if you have the capacity to understand and interpret numbers with respect to the economy and do the EXTREMELY ADVANCE LEVEL of calculus required in economics (not just econometrics---anyone who's in a top ranked program knows that even intermediate micro theory requires a background in calc 1,2,and 3, and the ability to tackle differential equations and do both linear and non linear algebra quickly and w/out a calculator (i was never allowed even the most basic of calculators)) can with out question do finance. it is essentially watered down Economics. The CAPM , and many correlation canceling formulas used in finance were derived by economists. In my experience it is MUCH more challenging, draws upon a MUCH more intelligent pool of students, and if coupled with a desire to work in finance it will provide u with the knowledge to make much more money in the IB world. The issue is some people studying econ are not focused on investments, but generally speaking, that segment that of econ majors interested in finance will make a LOT more $ than those with a strictly finance background. those studying econ understand the impact of everything going on in the world, and can turn the most ridiculous pieces of knowledge into a source of tremendous income. Derivatives and Options Markets also trace back to the Economists.

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MBA vs. Master’s in Finance or Economics: The Main Differences

Daniel has 10+ years of experience reporting on investments and personal finance for outlets like AARP Bulletin and Exceptional magazine, in addition to being a column writer for Fatherly.

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

MBA vs. Master’s in Finance or Economics: An Overview

For many individuals looking to advance their careers in business, earning a master of business administration (MBA) degree may seem like an obvious way to get ahead. But if you work in the world of finance or economics, getting a specialized degree might be a better alternative.

Both MBA and non-MBA programs have specific pros and cons, so it is essential to evaluate your long-term goals before choosing which route to take. It comes down to figuring out the types of skills you are trying to get and what job you see yourself pursuing.

Key Takeaways

MBAs are more expensive to obtain than a master's in finance or economics.
MBA programs are broader, while master's programs in economics and finance are deeper.
A master's in finance or economics typically requires a stronger background in mathematics.
Median salaries may be higher for MBAs, depending on the job.

Master of Business Administration (MBA)

Professionals often get a master of business administration (MBA) degree after spending a few years in the workforce. In fact, some MBA programs require that you have practical work experience before admission.

An MBA will cover finance and economics, but it will also include other business subjects. Nearly all advanced degrees in business are going to require solid math skills. However, MBA classes require much less abstract mathematical theory than graduate classes in economics and finance. Working knowledge of algebra is often sufficient for success in an MBA program.

Many employers prefer job candidates whose education encompasses the bigger picture, and an MBA certainly fits that bill. You may find a benefit in learning about a broad range of disciplines, from marketing to accounting and information systems. In a typical MBA program, students get exposure to all of these areas. In the process, they gain an understanding of how different parts of an organization relate to one another.

Earning an MBA can be expensive . If you want to attend a top-tier school, plan on spending over $100,000 to $200,000 for two years. Smaller private schools and even state universities are generally less expensive.

A 2023 survey by the Graduate Management Admission Council found that MBA recipients were expected to see a salary increase in 2023 whereas recipients of other business-related master's degrees were not. MBA grads earned a median starting salary of $115,000 in 2022, compared to $65,000 for those with a master's degree in finance. MBA graduates could work in the technology sector or for financial firms. They may also find positions in sales and marketing for product and service companies or at consulting firms.

Master's in Finance or Economics

Pursuing a master's degree in finance means taking a deep dive into topics such as investment analysis, corporate finance, forecasting, or risk analysis. In an economics master's program, you can expect to take on microeconomics, macroeconomics, and econometrics . These more focused programs tend to attract students who are particularly strong in quantitative analysis and critical thinking.

Specialized programs do have some significant advantages compared to MBAs. For starters, graduates develop specific skill sets. That can make them more attractive to employers looking for experts in a particular field or subject.

The cost of getting an advanced degree in economics or finance varies depending on the educational institution. However, it is generally much lower than the price of an MBA. According to 2021 data from The National Center for Education Statistics, graduate degrees can cost on average from about $10,000 to $30,000 and up per year. Private universities are usually more expensive than public universities.

On the other hand, classes in economics and finance often require taking extensive prerequisites in mathematics. For example, graduate-level economics students usually must take courses in differential calculus, integral calculus, and statistics before being admitted to the program. Furthermore, top universities prefer applicants who complete classes in linear algebra, multivariate calculus, and real analysis.

Many finance graduates go on to work at major corporations, global banks, and mutual fund companies. Economics majors often work in the private sector, but they may also enter academia or go into research roles after receiving a master's degree

Special Considerations

If you plan on working in the realm of investments, there’s something else you might want to consider when choosing a graduate program. Many of the professionals in this field go on to earn the chartered financial analyst ( CFA ) credential. CFAs must demonstrate competence in areas such as accounting, ethics, money management, and securities analysis.

Some MBA programs help prepare you for a CFA designation, especially those with concentrations in finance.

Finance professionals can make their road a bit smoother by choosing a master’s program that incorporates much of the content for the CFA exam. That reduces the amount of preparation they’ll have to do later. A list of graduate programs recognized by the CFA Institute is available on the organization’s website . Many of the programs affiliated with the CFA Institute are aimed toward a master's degree in finance.

Work Experience

Even if you obtain a specialized degree, companies are likely to look for some relevant work experience. It often pays to work for at least a couple years after earning an undergraduate degree, rather than rushing headlong into a graduate program.

How Hard Is it to Get an MBA?

Earning masters of business administration (MBA) is considered challenging. In many cases, you will need to land a job first with a company to get experience before pursuing your MBA. MBA degrees are also expensive, costing tens of thousands of dollars or more.

How Long Does it Take to Earn a Master's Degree in Finance?

Like many masters degrees, a master's degree in finance typically takes about two years, but it may take longer depending on your course loads. Some colleges offer accelerated programs that allow you to get a master's degree in finance sooner than two years.

What Can You Do With a Master's in Economics?

If you have a master's degree in economics, you may pursue many types of careers. You could work for private companies, non-profits, or the government. For example, you could work in for an insurance company or become a college professor.

The Bottom Line

The right degree for you will depend on many different factors, including your desired career trajectory, your budget, and your available time, among other factors. In general, the difference between and MBA and a master's degree in finance or economics is that your earning potential tends to be significantly higher with an MBA. However jobs that require an MBA are generally very demanding.

Harvard. " Annual Cost of Attendance ."

Graduate Management Admission Council. " 2023 Corporate Recruiters Survey GMAC ."

National Center for Education Statistics. " Average and Percentiles of Graduate Tuition and Required Fees in Degree-Granting Postsecondary Institutions, by Control of Institution: 1989-90 Through 2020-21 ."

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How to Choose a Major: Finance vs. Economics

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What’s Covered:

Overview of finance vs. economics, how to prepare for finance and economics in high school, the college experience: finance vs. economics, after college: finance vs. economics.

One big choice you’ll have to make when going to college is deciding on your major. To pick this, you want to think about what you’re interested in as well as what fields have solid career options and projections.

If you love math and analytical thinking, then two options you may want to consider are finance and economics. Learn more about finance and economics majors in this post so you can determine which one may be the best fit for you.

Whether you choose finance or economics, you’ll be learning similar skills. Both majors will have a lot of the same core classes, such as Introduction to Business or Accounting 101. As you advance in your major, you’ll take different courses like financial management for a finance major and macroeconomics for an economic major. Students in both of these majors will need to make sure to develop similar skills to succeed in future careers such as:

Problem solving
Logical thinking
Ability to analyze lots of data and numbers
Time management skills
Knowledge of spreadsheet programs and best practices
Communication skills
Qualitative and statistical analysis skills

You’ll learn the other needed skills as you progress through the courses in your chosen major, and continue to develop them as you grow professionally after college. Finance and economics will both have overlap as they are related disciplines; however, there are some distinctions worth mentioning.

Economics Major

As an economics major you’ll take a global, national, and local view of markets and what makes them work. You will learn about capitalism and other systems that drive a nation’s economy. An economist takes a look at the big picture. It’s important to keep in mind that economics is actually a social science that explores how goods and services are exchanged and how human behavior affects these dynamics. There’s still a lot of math involved, even though it is considered a social science.

Economics breaks down into both macro and microeconomics. Macroeconomics focuses on the larger economy itself, while microeconomics examines individuals and organizations. As an economics major, you’ll usually have the opportunity to focus on one of the two.

Finance Major

Finance takes a look at financial systems. Specifically, the major explores money management and creation, as well as credit, investments, assets, banks, and more. There are three types of finance: personal finance, corporate finance, and public finance. You’ll have to determine which type you’d like to do. Personal finance involves managing money of individuals, corporate finance involves working with the assets and liabilities of a business, and public finance deals with tax systems and other aspects of a government’s finances.

In high school, if you want to start preparing early on for a finance or an economics major, then you will want to put your focus on mathematics courses. Since math is a core part of both areas, colleges will want to see that you have not only succeeded, but also excelled in math. This may involve taking honors courses or AP courses in math and economics.

Along with your coursework, you may want to reach out to local businesses to see if any of them offer internships within their finance department or if your city has an internship in economics. This can help differentiate you from other applicants as it shows that you’ve actively worked to seek out opportunities outside of the classroom. Volunteering can also be important to colleges as they like to see community involvement. Consider using your time to help teach math to underprivileged children or to tutor someone who may be struggling with learning the concepts they’ve seen in class.

Additionally, join any clubs that your school may have that are centered around math. For example, many schools have competitive math teams that travel around to compete with other schools in tournaments, for example, Academic Decathlon. Joining service-based organizations such as Beta Club and National Honors Society may also boost your application.

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Although there is some overlap, finance and economics majors have distinctive courses.

Common courses you’ll take as a finance major include corporate finance, financial reporting, strategic management, financial modeling, investment analysis, and money and banking.

As an economics major, you’ll be in courses like American economic history, international economics, price theory, economic principles, game theory, and econometrics.

Once you’ve decided on a major, you’ll need to search for a university that offers your major and has a good reputation in the field. Along with that, though, you’ll need to determine what university meets your other needs. For example, do you want a college with a vibrant student life program? Is student body diversity very important to you? Using online tools from CollegeVine like the school search tool can help you find schools based on size, location, diversity, and other important factors. You can also use our chancing tool to determine your approximate chances of getting into your chosen school, as well as implement any suggestions the tool may make for you.

Look up all the information you can find about the college you want to attend. You’ll need to know about all of the course requirements and just how rigorous the curriculum will be so that you can implement a time management process.

You’ll also want to choose a school based on its faculty, especially in the world of finance and economics. These faculty, and the alumni, may be able to help you network and find a good job as soon as you graduate.

Some of the top best schools for finance in the country include:

Harvard University
Massachusetts Institute of Technology
Princeton University
University of Pennsylvania
Stanford University

If you’re focusing on business and want to target the top five best schools for business , then you will want to look at universities such as:

Cornell University
California Institute of Technology
Washington University in St. Louis
Carnegie Mellon University

Once you’ve graduated, you may decide to go on to obtain your MBA or even a doctorate degree, particularly if you wish to pursue a career in academia as a university professor. If you’d rather enter the private sector, there are also many jobs you can take right out of college without obtaining a postsecondary degree.

Economists, according to the Bureau of Labor Statistics , should have relative job security in the next decade. By 2029, the field is projected to grow by 14 percent, much higher than average. In May 2020, people in this role were making a median salary of $108,350 annually. Other types of jobs that economics majors may have include:

College professor
Political scientist
Urban and regional planner
Survey researcher
Operations research analyst

Business and financial occupations should add more than 400,000 jobs by 2029, and people in these roles make about $72,250 annually, much higher than the average salary of $41,950. Types of jobs that a finance major might land after college could be:

Cost estimator
Financial analyst
Insurance underwriter
Personal financial advisor
Purchasing manager

Final Thoughts

No matter which major you choose, you should likely end up in a field with massive potential for growth, both professionally and personally. Take the time in high school to explore your passions and figure out which one you’d prefer more. You may find that you prefer the smaller scale of finance, or the bigger picture of economics. Would you rather work in a business in their finance department or perhaps for yourself as a personal finance advisor? Or would you want to be somewhere where your knowledge can help enact sweeping change, like in a government that relies on economics to make decisions?

Choose the major that you feel most passionate about and go from there. College will give you the time you need to evaluate your choice, and you can even take overlapping courses to help reinforce your decision.

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Your chance of acceptance, your chancing factors, extracurriculars, economics vs. finance major: which is better.

I'm having trouble choosing between majoring in economics and finance. Can anyone who has experience in either (or both) of these fields help me understand the differences, and which one might be a better choice for me in terms of overall employability, job satisfaction, and earning potential?

Sure, I'd be happy to help you understand the differences between economics and finance majors and what each of them might offer in terms of employability, job satisfaction, and earning potential.

Economics is a social science that focuses on the production, distribution, and consumption of goods and services. As an economics major, you would study a wide range of topics, including microeconomics and macroeconomics, fiscal and monetary policy, international economics, labor markets, and economic theory. It's a versatile degree, which means you can work in various sectors such as government, non-profit organizations, think tanks, and the private sector. Career options include economic consulting, market research, public policy, and even academia if you pursue a graduate degree.

Finance, on the other hand, deals with the management of money, assets, and investments. As a finance major, you would study subjects like corporate finance, investment analysis, financial planning, risk management, and banking. Finance majors often find work in fields like investment banking, portfolio management, risk analysis, corporate finance, and financial consulting. The job opportunities are predominantly in the private sector and financial institutions.

In terms of employability, both majors generally have good job prospects. Finance tends to have more specialized career paths and often leads to higher starting salaries compared to economics. However, economics majors often find success in a variety of fields, allowing for more flexibility in career choice.

Job satisfaction can be subjective and depends on your interests and personal preferences. If you have a passion for understanding how economies function or have a strong interest in public policy, you might enjoy economics. If you are more interested in managing investments, analyzing financial risks, and working in the world of finance, a finance major could be a better fit.

Regarding earning potential, finance majors generally have higher earning potential compared to economics majors, especially if they work in investment banking or wealth management. However, some economics majors that enter consulting or public policy can also earn competitive salaries.

For more information on the differences between economics and finance click here: https://blog.collegevine.com/finance-vs-economics-major/

In conclusion, both economics and finance can offer excellent career opportunities, but the choice will ultimately depend on your interests and career objectives. Consider taking introductory courses in both subjects before making a final decision. Also, talk to professors and professionals in each field to obtain more insights into potential career paths.

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CollegeVine’s Q&A seeks to offer informed perspectives on commonly asked admissions questions. Every answer is refined and validated by our team of admissions experts to ensure it resonates with trusted knowledge in the field.

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COMMENTS

Economics vs finance phd ? : r/AskAcademia
Last year's AACSB salary survey showed that the 90th percentile for Econ new hire assistant professors was about $115k but for finance it was right around $190k. If you are really good economist (i.e. can hit AER-level journals consistently) the salary differential will go away over time.
Ph.D Economics vs Ph.D Finance
June 22, 2008. A finance PhD program is far more competitive to get into than an economics PhD program is. I just graduated with and undergraduate double major in both finance and economics. I have been accepted to a Finance PhD program. The acceptance rate was ~4% and teh average GMAT math scores are in the top 90%.
Admissions comparison -- PhD Finance vs. PhD Economics
Perhaps I can start by making the following observations: (1) Clearly, there are close similarities between the core courses between a PhD Finance student and a PhD Economics student. I believe both need to go through the entire micro, macro and metrics sequence. (2) PhD Finance programs appear to be more competitive.
graduate admissions
Finance and econ USE a lot of math, but they aren't math degrees. Between these two I would at least recommend econ over finance unless you know for certain that you want to work/research in finance. Most econ degrees include some work in finance, along side other econ areas, so you can cast a broader net while still learning what interests you ...
Finance vs economics: which to study
From household budgeting to international policy, finance and economics impact the daily lives of individuals and communities around the world - in ways you mightn't even notice. Despite being two distinct disciplines, finance and economics often interconnect and can sometimes appear to be interchangeable. You may be left wondering how each area of study differs from the other, how they ...
The complete guide to getting into an economics PhD program
Here is the not-very-surprising list of things that will help you get into a good econ PhD program: good grades, especially in whatever math and economics classes you take, a good score on the ...
Finance vs. Economics Degree: What's the Difference?
Key takeaways: Finance is the area of economics that studies how individuals and businesses acquire and manage money, while economics focuses on the movement and trade of goods and services. There are several differences between a finance and economics degree, such as coursework, specializations and career opportunities.
Is an Economics PhD Worth It? The PhD Pay Premium
According to the latest INOMICS Salary Report, economists with a Master's as their highest degree experienced a 3.2% increase in pay on average since 2022, while those with a PhD have experienced a 35.9% increase. This has widened the earnings premium between the two categories from 80% in 2022 to 91% in 2023.
How Hard is Economics vs. Finance?
Get real. Regarding M&A finance, there is a reason bankers are known as monkeys. Again, if you're only going to compare the difficult economics to the easy finance, you're going to bias your answer and give shit advice. The thread is about undergrad finance vs econ, so any discussion of graduate level coursework is pointless.
Finance vs. Economics degree: which one?
4 months ago. Both finance and economics are excellent choices for someone interested in a career in the financial sector, but they do differ in focus and potential job opportunities. Finance is more practical and focused on the management of money, investments, and financial assets. It prepares students to understand the financial markets ...
MBA vs. Master's in Finance or Economics: The Main Differences
Key Takeaways. MBAs are more expensive to obtain than a master's in finance or economics. MBA programs are broader, while master's programs in economics and finance are deeper. A master's in ...
How to Choose a Major: Finance vs. Economics
Business and financial occupations should add more than 400,000 jobs by 2029, and people in these roles make about $72,250 annually, much higher than the average salary of $41,950. Types of jobs that a finance major might land after college could be: Accountant. Auditor. Cost estimator. Financial analyst.
Economics vs. Finance major: which is better?
In terms of employability, both majors generally have good job prospects. Finance tends to have more specialized career paths and often leads to higher starting salaries compared to economics. However, economics majors often find success in a variety of fields, allowing for more flexibility in career choice. Job satisfaction can be subjective ...
Finance vs Economics
Difference Between Finance and Economics. Comparative Table. Key Differences Between Finance and Economics. Educational Requirements. #1 - For Economist. #2 - For Finance Professional. Primary Tasks or Roles. #1 - Primary Tasks of an Economist. #2 - Primary Duties of Finance Professional.
Is an economics degree worth it? Yes! Find out why
Yes! Find out why. Econ majors earn an average of $72,055 just 4 years after graduating. On average, economics majors also earn more than business, finance, and accounting majors. A master's degree in economics does not provide a huge income boost - consider other graduate programs instead.
Accounting vs. Economics: What's the Difference?
Related: Microeconomics vs. Macroeconomics: 6 Key Differences Accounting vs. economics degrees There are both similarities and differences between accounting and economics degrees. It's common for individuals pursuing either degree to start at the same level, with the same undergraduate courses such as principles of finance and basic math.
Economics Major vs Finance Major
Ryan O'Connell, CFA breaks down the difference between an Economics Major vs a Finance Major. 📈 Need help with a project? https://ryanoconnellfinance.com/h...