Profile Evaluation + Econ or Finance Programs?

[snowme]

I though econ programs put more emphasis on math than finance programs... Does anybody have any thoughts on that?

[GymShorts]

Originally Posted by snowme

I though econ programs put more emphasis on math than finance programs... Does anybody have any thoughts on that?

We've debated this at least once before, and the whole issue of whether economics or finance is more selective, and we didn't reach an consensus back then, and I doubt we will now. That being said, here are my thoughts:

First, I think finance and economics are both math-intensive programs, but the emphasis of what math matters differs between the two programs. I think finance puts more emphasis on differential equations and stochastic processes (so having stochastic calculus will certainly help).

Second, I think the mathematical prerequisites are more flexible in finance programs. For example, economics PhD programs tend to say that any competitive applicants must have multivariate calculus, linear algebra, and at least one semester of probability and statistics (taught in the math or statistics department; not the economics department). Finance PhD programs recommend a lot of math but I think they would let someone get away with not having linear algebra if they have ordinary and partial differential equations.

Given your profile, I don't think you need to worry much about this. You have a good shot at some great economics and finance programs. However, if I were to place a bet, I think comparatively that you are better qualified for finance.

[rcwlhk]

Not to be nitpicking the fine lines between the words but how do you do differential equations (ODE and/or PDE) without knowing linear algebra?

Originally Posted by GymShorts

We've debated this at least once before, and the whole issue of whether economics or finance is more selective, and we didn't reach an consensus back then, and I doubt we will now. That being said, here are my thoughts:

First, I think finance and economics are both math-intensive programs, but the emphasis of what math matters differs between the two programs. I think finance puts more emphasis on differential equations and stochastic processes (so having stochastic calculus will certainly help).

Second, I think the mathematical prerequisites are more flexible in finance programs. For example, economics PhD programs tend to say that any competitive applicants must have multivariate calculus, linear algebra, and at least one semester of probability and statistics (taught in the math or statistics department; not the economics department). Finance PhD programs recommend a lot of math but I think they would let someone get away with not having linear algebra if they have ordinary and partial differential equations.

Given your profile, I don't think you need to worry much about this. You have a good shot at some great economics and finance programs. However, if I were to place a bet, I think comparatively that you are better qualified for finance.

[Bargalhao]

It´s possible. I´ve had a class of Diffy Q before Linear Algebra. DE only uses basic stuff from LA (for example you should know how to compute determinants for the Wronskian, but how to do that can be explained in half an hour).

[rcwlhk]

From that aspect than yes --- you only need to calculate the Wronskian, which is obviously quite straight forward. But I find the concepts from linear algebra are critical for DE's --- i.e. the concept of a basis vs. fundamental set of solutions, higher dimension system of ODE's, etc.

Originally Posted by Bargalhao

It´s possible. I´ve had a class of Diffy Q before Linear Algebra. DE only uses basic stuff from LA (for example you should know how to compute determinants for the Wronskian, but how to do that can be explained in half an hour).

[cooper]

To the OP, You can always do finance at some Econ programs. For example, Duke and UNC are very flexible as far as Econ PhD students taking finance courses and allow you to work with finance faculty and both have great finance departments. Also, there are PhD programs in the b-school of universities such as Northwestern (MEDS). Even these departments rival top 25 Econ departments and you should be able to do Econ/Finance work in these places (this is only my conjecture you should check the faculty). Places like this might be just what you are looking for. Also, there is always the option of going to a straight Econ PhD at a place that has faculty doing finance.

Also you should keep in mind that Econ guys that do good Finance research can end up either in Finance or Econ as an assistant prof, but a PhD in finance typically will not become an Econ assistant Prof. This of course only matters if you want to go into academia. I don't have any data on this but it seems to be my impression based on previous debates and I have observed this a few times as well.

In summary, you should at least consider places I mentioned above and also pure Finance programs. Then go to the best place you get accepted to.

Check your PM.

[unitroot]

I think decision about economics vs finance PhD programs with your interests should be done on a case by case basis. For example, UNC and UCSD economics departments have fine faculty for financial econometrics, so pursuing PhD in economics certainly makes there. On other hand, at Chicago, the GSB has the best finance people, and so it makes sense to apply to the GSB PhD programs directly instead of the economics department.

[snowme]

Thanks again for these great comments. I'm really surprised by the quality and seriousness of the responses here.

How would you rank the econ departments of UCSD and Duke? I think especially UCSD has lost some of its most prominent faculty in recent years.
Therefore I think its rank on econphd.net should not be up2date.

[desimba]

Originally Posted by Centrum

well, I wouldn't be that enthusiastic about that profile...
certainly very good but I think a bit weak on the math part!!
math I,II covered probably calc 1-3 and a bit of lin. algebra but NON proof based...and stats 1,2 were probably also applied courses!
besides that business courses require almost no math and focus more on your ability to memorize as much stuff as possible...
so I would say you have a good shot at econ programs however for the top finance programs your math background might be a bit weak...

I second Centrum's comments. The math preparation could be perceived as somewhat inadequate, especially at the top schools.

Regarding the decision of what programs to apply to, I would urge you to spend quite a bit of time looking at the websites of the programs of interest and trying to understand their focus areas. "Financial Economics" for instance could mean somewhat different things at different places. Finally, different schools differ in the extent to which the business schools and the econ program work together. e.g. at CMU & Purdue, there is no stand-alone econ deptt. in the faculty of arts and sciences as at most other universities. The econ departments there tend to be tied somewhat more closely with the business school as they are housed there. That is not universally true so you need to keep that in mind as well.

[asa_sl]

you are definetly a top ten candidate . I think your maths skills not bad as german system is different from US math part.