WHAT IS BEHAVIOURAL ECONOMICS?
Q I’m interested in pursuing a course in behavioural economics. Can you throw some light on it? ATo
maximise value and profit we would expect humans are logical, rational and selfinterested beings that consider costs and benefits before taking any decision. However, actual human behaviour tends not to follow this robot-like logic but often tends to be irrational, self-sabotaging and even altruistic, affected by bodily states and feelings. While Adam Smith recognised the role of psychology in decision-making centuries ago, the sub-discipline called behavioural economics – the study of how people actually make choices, which draws on insights from both psychology and economics – was even only a couple of decades ago considered a marginal, exotic endeavour. Today, however, behavioral economics is a young, robust, burgeoning sector in mainstream economics.
A niche career in the arena of economics, it draws heavily on psychology and sociology, so individuals interested in a career in behavioural economics should take courses in these areas in addition to economics classes.
Alternatively you could pursue a bachelors degree in Sociology, Economics, or Mathematics. Following this, you will then be able to pursue a Master’s in Behavioral Economics or MSc. in Behavioral Economics and Finance. Previous experience of psychology, economics, or behavioural science is not mandatory. A background in maths will be helpful. Courses may include decision-making, taxation in public economies, technical analysis, ethics, finance theory and institutional economics. Degree programs typically teach the underlying psychological factors that drive the economic decisions of individuals. Graduates go on to work in public policy settings, businesses, marketing, financial risk analysis, investment analysis and tax advisory.
Universities that offer a graduate degree in behavioral economics include Harvard, UCL-Berkeley, Brown, Monash and Nottingham.
SANJEEV VERMA is an international education counsellor