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Applying to Economics Programs

Optimizing Placement

Overview

This text is designed to help undergraduate students to conduct academic research, select coursework, and master skills which will help admission to top Economics PhD programs.  By preparing to be admitted you also prepare to excel. 

Start with the end in mind

In planning the beginning, it’s useful to imagine the end.  A successfully graduated economics PhD is one who has written an excellent research paper by the beginning of the fifth and final year of the program.  This paper should answer an interesting (important) question while showing proficiency in technical skills.  To convince hiring committees of individual quality (rather than a lucky first paper or an over-involved adviser), the individual will have one or two other quality papers.

The individual who places at a top university after their PhD program is someone who can select a relevant question, research the institutions surrounding it, grasp and expand the theory cupping it, enterprise the finding and analysis of relevant data, and present these findings while adequately responding to the scrutiny of questions intended to expose holes in intellectual rigor, technical expertise, and institutional knowledge.

With this in mind: the foundations to become this person start by a mastery of intermediate mathematics, statistics, and economics. 

 How do I know if I should pursue an economics PhD?

PhD economists have a broad array of job options, from academic research in universities and think tanks, to policy creation in governments, to litigation consulting or hedge-fund management (much reviled). 

However, a PhD in economics is not everything to everybody.  Obviously academic research is attractive for its freedom; and economics offers a ticket to faculty positions in law schools, business schools, public policy departments, political science departments, as well as economics departments.  However, academics are not paid in gold bars; the average academic economist begins at $80,000 in a top 100 university economics department with a moderate premium for working in a business school ($130,000) and a sizable penalty for working in political science and sociology.  The best professors at the best universities are paid around $300,000.  Jerry Hausman (MIT) said, however, “My investment income dwarfs my consulting income, and my consulting income dwarfs my academic salary.”  

Those deserting for litigation are sometimes paid very well, earning well over $300,000 with similar pay and less variance in hedge funds and banking.

However, economics requires an intense study and mastery of mathematics, statistics, programming, and economic theory.  If these subjects are painful, graduate work in economics will be proportionately distressing.

 Overview of the application helps us pick the right activities in a world of scarce time and capacity

The application decomposes into four parts:

  1. Coursework and Grades
  2. GRE
  3. Letters of Recommendation
  4. Personal Statement

They will look at your Math GPA, Economics GPA, and overall GPA.  Many applications will ask specifically what are the most advanced courses you took in mathematics, statistics, and economics each reported with the grade you received.  From BYU, We have rarely (never to my knowledge) had a top-five placement with a GPA lower than 3.95. 

The letters of recommendation will say what sort of interaction you had with the professor (research, teaching, coursework).  The two important things for each letter the individual’s ranking of you (he is the second best student applying this year from BYU; she is the best student we’ve had in ten years; etc.) and comments on your contributions to the professors research.  Make the people you research for happy.   

The personal statement for PhD programs is different than the one you were trained for in high school.  Rather than talk about your goals and overcoming adversity, schools want to see (1) you are a capable researcher with good ideas (2) you can communicate and (3) you are a fit for their program. 

The GRE requires only a high-school geometry and algebra basis, but requires a bit of cleverness in the quantitative section.  Many programs will not consider your application if you do not have an 800 on the quantitative section.

 1. Coursework and Grades

Math is excellent training in problem solving, even when it’s not directly applicable to the economics.  However, there is a definite hierarchy. 

Essential Math                             

  • Differential Calculus                            
  • Integral Calculus                                                   
  • Multivariable Calculus                   
  • Linear Algebra
  • Real Analysis

Extremely Important Math         

  • Differential Equations             
  • Object-Oriented Programming                      
  • Topology                        
  • Statistical Theory                    
  • Probability Theory                                  
  • Functional Analysis
  • Stochastic Processes

Essential Economics         
  • Microeconomics       
  • Macroeconomics  
  • Econometrics
  • Applied Econometrics  
  • Game Theory
Extremely Important Economics
  • Advanced Econometrics
  • Advanced Microeconomics
  • Fields that interest you (IO, Labor, etc.)

If you can, start early enough that you don’t have to take more than two math courses at a time. They require time and thought.  Taking field courses (IO, Labor, etc.) will be a great help to you in thinking of questions early and often and reducing uncertainty when it comes time to choose in grad school.

Grades are important—you need to have five A’s for every A- coming from BYU for a clear shot at a top-five school.  However, mastery is more important. Especially in real analysis, master the material in its entirety.  Understanding the framework will open economics to you.  Avoid math classes like Abstract Algebra and Complex Analysis which are interesting but have little economic application.  The opportunity cost is that you could be taking higher-level real analysis, programming, or theory.  The Math Department is working to remove those requirements for economics double majors.  If this is not the case at the time of your reading this, please email me (acjohnston3@gmail.com) and Dr. Grant (grant@math.byu.edu).  He’s been working on this in our behalf.   

2. Letters of recommendation

Letters are the quiet cues professors use to select the promising among students who all appear identical or to sink the grade grubber who doesn’t show any signs of economic genesis.  The fact is that 500 of the thousand students applying to Princeton each year look statistically identical: They all have a perfect GRE quant score, a 3.80-4.00 GPA, math and economics double majors, undergraduate research experience, letter-writers selected based on personal favorability, and a boring personal statement.  Admissions committees look to the letters of people they know or whose work they respect.  That’s the only way to separate a bunch of people who all look identical.  Compiling early who has friendships where is helpful if you have strong preferences for certain schools.  The most observable connection to young students is the school each professor graduated from. 

Doing research well requires time.  You will many times do hours of concentrated work to answer a short, perhaps peripheral, question.  Be available, responsive, and make turn-around time as quick as possible.  Come up with your own research ideas and talk to your professors about how to pursue them after you’ve developed the idea.  It is better to concentrate your interactions with professors who will write your letters so their letters can be more descriptive.  

Letters from non-economists are generally not helpful to admissions committees.

3. Personal Statement

In the summer of 2011 Paul Krugman wrote in the New York Times that he was on the Admissions Committee at Princeton the year previous and wanted to make a rule that every student who said he or she was “passionate about economics” was automatically rejected.  Instead of stating in several ways that you are converted to economics, look for unique statements that demonstrate your interest and capacity.  They want to know

  • You're a capable researcher with interesting research ideas,
  • That your interests are a good fit for their program.
  • You can communicate well

Susan Athey (Harvard) wrote:

“It’s very important to write an essay saying what kinds of areas of economics you’re interested in, what questions you think are interesting, what papers you’ve read that you’ve liked…Be as specific as possible.  It may be helpful to discuss your thesis or research assistant work…Mostly schools just read these to see what field you’re interested in and to get a sense whether you have any idea what you’re getting yourself into.”

If you are aware of a school that you think would be an especially good fit for your interests, read the papers from the professors at that school you’re interested in working with (it would be best if they were senior faculty (tenured) who are not the department hot shot—knowing the not-hot-shot is a better for the school since everyone already wants to work with the hot shot).  Say something early in the personal statement regarding how you believe that particular school is the best fit to your interests.  For instance:

 

“I'm interested in how electronic education might improve equity in rural and inner-city regions that have trouble attracting quality teachers.  Claudia Goldin and Larry Katz' preliminary work in this area is the first of its kind.  I have devised of the following identification strategy…We can apply the methodology to…using [such and such] data…to answer the question…” 

 

In order for a signal to work it has to be costly to fake.  Digging deep with a couple schools is a great signal for this reason.  This communicates that you prefer their school, have interest complementarities, and can think well about research.  Be friendly, to-the-point, and omit all unnecessary words.  It’s best if it reads like a research proposal without being one.

Also talk about your preparation in research and coursework.  Explain that BYU is vigilant on grade inflation and thus the average economics GPA is a 3.01.  William Nordhaus (Yale) was surprised when he found out and suggested we do a better job making this known.  Talk about your role in the research projects you’ve participated in. 

Berkeley's admission director, David Card, said:

"Regarding personal statements, remain focused on your interests and your research experience.  And to be honest, there is a lot of variation in how we read applicant files."

I take that to mean that th
ey use the personal statement to separate students among those on the margin (those not obviously admitted or obviously rejected).  And the school you want to get into is the one that you're "almost" into.  You're in at Kentucky.  You're almost in at Harvard. 

If you have a 3.9+, a 98% p
ercentile GRE and two years of research experience with some enthusiastic letters, you're in the race and are beyond the threshold to be considered at top-five departments, now its just about writing a better statement than the other students on the margin.  BYU's statements are notoriously bad.  There's been an idea at BYU that committees don't read the statements.  Not true.  Statements are a crucial separating variable for almost every BYU student.


Wharton's economics admission director, Kent Smetters, said the following:

"The personal statement is critical and often the sole differentiation since a lot of students have good grades in math and econ. They should focus on the type of research that they want to do, referencing the relevant papers in the field as demonstration that they have studied it well."

4. GRE

There are thresholds here.  Getting an 800Q is nearly required at a top-five school.  Henry Farber (Princeton) said that they don’t look at applications with less than an 800Q since they have 700 applicants with 800Q.  For anyone with more than a math minor, Sticking an 800Q is solely a matter of study and practice.. 

On the verbal section, if English is your first language, flags will appear if you score below 500V.  There is more latitude if English is not your first language.

Other advice which is Important and I never knew

  • Always waive your right to view your letters of recommendation: a letter you can view is suspect.  Both the letter reader and the letter writer are a little skirmish if you don't waive your right.
  • As much as is possible, if you're applying to different kinds of programs (law, economics, finance, etc.), don't disclose that fact in any way.  If you are applying to two programs at a particular school, it's likely you've blown your cover at that particular school.  The admissions committees I've spoken with take applying to varied schools as a sign of a weak stomach--this kid isn't sure he wants to do _____, is he going to quit on us?

Gather more data points

It would be difficult for a single writer to capture all that is involved in preparing and applying for graduate school.  Find other perspectives and weight them by what they say in common and how close the individual is to the process.  Look at Greg Mankiw’s blog:

Susan Athey (Harvard) has great advise on applying to graduate school here.  Christian Vom Lehn wrote a lengthy piece on preparing and applying for graduate school which is on the BYU website and can be found  here. The moderator on the economics application forum put this together which links to great information organized by question and is very helpful.

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