Evaluate the following reasoning (Econ Ph.D.):

[IvyBoy]

A friend of mine who's an econphd aspirant said that she is considering a Ph.D. in agricultural and resource economics (applied economics) for the following reasons:
1. As far as academic quality, if she goes for ag.econ, then her profile could get her in the top-5 schools, where as she expects that this same profile could get her into a department ranked somewhere around 50 or less (given the competition and the fact that she doesn't have real analysis).
2. As far as future earnings, the average for pure economists is about 74k and there is a 5% salary penalty for every 20 ranks you go down. Therefore, we can assume that graduating from about 60th school she could earn around 62K and the average for ag.economists is 62K which means that there is no significant salary difference between those two options.
3. She believes that a PhD in agricultural economics is more relevant to developing nations (natural resource dependent economies) and gives her a chance to see more immediate results of her research than pure economic research. And this ignites her interest in the field among other things.
4. It is more likely for someone to join international organization as an ag.economist from a top univeristy than as an economist from an average school (especially for development institutions like WB, UNDP).
5. The only reasons she is a little doubtful about ag.econ are a) ag.econ might limit her focus in the long-run when compared to pure econ b) u.s. citizens are likely to be more abundant in ag.econ than pure econ so if she wanted to stay and work in the u.s. after graduation, pure econ might give her more opportunity for this route.

What do you guys think? Feel free to evaluate her reasoning. All comments and suggestions on any one or more of the above reasonings will be appreciated.
~ IVYBOY

P.S. all statistics in this thread is from http://www.aeaweb.org/joe/articles/2004/2004_market.pdf

Thanks.

[t_do]

Originally Posted by IvyBoy

2. As far as future earnings, the average for pure economists is about 74k and there is a 5% salary penalty for every 20 ranks you go down. Therefore, we can assume that graduating from about 60th school she could earn around 62K and the average for ag.economists is 62K which means that there is no significant salary difference between those two options.

This average is from only the top schools?

[IvyBoy]

I think it's from all the schools that Siegfried & Stock used in their sample. I don't think they include schools ranked at the bottom, but I don't think it's from the top schools only either.

[JKRIS]

In point 5, I think you meant that her choices are limited. This is true. I am not sure about the salary differences but most people seem to think that a 10K difference in starting salary is the norm.

I also think that answer is not straight forward. It is case specific - depends on your choices.

[IvyBoy]

Interesting fact: the unemployment rate for ag.econ people is less than the unemployment rate for pure economists.

Just thought someone should comment on that!

[anotheronebrah]

where did you find that piece of information and why are you posting under multiple names?

[IvyBoy]

I found that info from the "market for new PhDs in agricultural and resource economics" which I found from google. And what the heck r u talking about multiple names?

[IvyBoy]

any more advice?

[Larami]

With some ag. econ phd programs you take exaclty the same core classes your first year. The ag part comes as a field, so it would be your major field and then you would also have a minor field. So really, it's just like a specialization, you would still be a real economist, but with a concentration in Ag and another field.

[southern man]

"Real economist" - I like that. Edit: I know many people who would think me arrogant for thinking you need a phd from a mathematical econ program to be a "real economist".