Studying Business — The Academic Route: Math and Me
Now that you have decided that maybe getting a PhD could be right for you, it is time to talk about the first big hurdle: Math. This is among the most confusing points for undergraduate economics and finance students thinking about academia. It is one of the tools that make graduate economics so different. 1st year PhD students in economics or finance all take about the same first-year courses. Microeconomics, Macroeconomics, and Econometrics. But what these names leave out, is that these classes are essentially applied mathematics. Math is so important to these fields that PhD programs are more likely to list math prerequisites than economics ones. Many PhD programs, including here at UW, include a summer math camp to help students improve those skills.
Luckily for UW students, the economics department even offers a math-emphasis option for a bachelors major that can help with finishing some of these prerequisites. The American Economics Association has a useful webpage listing the topics and courses for studying economics. This is most helpful as many courses differ from university to university and PhD programs are unlikely to list each and every one. At its core, one should expect to take three semesters of calculus (up to multivariate), two or more semesters of statistics, courses in linear algebra, differential equations, and an introduction to proofs. Beyond this, it is common knowledge that Real Analysis is a strong signal as to your success in a PhD program, and as such, many programs will seek out students with experience in the subject. That being said, checking the box and taking the course is not sufficient; excelling in math, particularly in the higher level courses is the real measure.
Math is so important, in fact, that a large portion of PhD candidates in economics and finance have math as a double major or even as their only major. Majoring in economics and finance still has its benefits, as we will talk about later, but the math requirements are extensive and not something to be ignored. Among the numerous undergraduate students I have talked to who are considering graduate study in economics or finance, this is among the most surprising things. Notably, the sheer amount of math courses cannot be accomplished in a single semester or even a year. It is often best to take one or two each semester if you have the aspiration for graduate study in economics or finance.
But what about math that is not listed? More math, especially advanced math, is always better. But I will address one important consideration. Generally, business school statistics and calculus courses are insufficient to meet the requirements, with many universities specifically listing this on their admissions pages.
Programming experience can also be a major boon. It generally does not matter what language whether it is STATA, MATLAB, Python, etc. Most PhD students will serve as teaching assistants their first year and having these skills will be beneficial in addition to helping in your own coursework. In particular, if you are looking to do a predoc it is often listed in the applicant qualifications. Another benefit is that a lot of upper-level math courses will have you use LaTeX; this is a programming language for writing math in papers that is commonly required to submit homework in PhD classes. Knowing how to do this can save you a lot of time and frustration later.
As with everything I write here, I recommend talking to your advisors and professors before making any decisions. Utilize the law of large numbers and hopefully converge on the truth. Courses vary widely from university to university so knowing which courses match the topics you are expected to know is a challenge. One way is to take the list from the AEA to your advisor or math professor to get the courses you need.
In summation, math is one of the core prerequisites to a PhD (or master’s) program in economics or finance. Unless your university has a special path for it, like here at UW, it can be an unfortunate surprise to students in their junior or senior years thinking about graduate school. If you are not up to this hurdle, it is okay; it does not mean abandoning your love for economics/finance. There are plenty of alternatives in the way of programs in public policy, political science, and more. But if you are set on this PhD, the math required is just a way of life.
