Top Shop

Listener: 20 November, 2004.

Keywords: History of Ideas, Methodology & Philosophy;

About this time each year I am asked about the merits of the various university economics departments. Typically, someone’s daughter or nephew is thinking about studying economics. This year, the questioner frequently adds, “Isn’t there some official ranking of economics departments?”

The answer is yes and no. Yes, because earlier in the year the Tertiary Education Commission’s allocation of the “Performance Based Research Fund” involved measuring the research performance of each teacher, which was aggregated up to an overall measure that they used to rank the departments.

But no, because the PBRF measure is but one dimension of departmental performance, and it may not be particularly relevant to the needs of an undergraduate. What the student wants is a well-taught foundation in the discipline. Researchers are not necessarily the best teachers ? some are superb, some are incompetent, most are average. In any case, the student may not meet a department’s top researchers in their early years. Indeed, of the eight economists given the top grade A, three have since gone overseas and a fourth changed universities. The remaining four may do little undergraduate teaching.

The description of As, in whatever discipline, as “world class” is misleading. Best think of their research as “internationally engaged”, although their research topics may be very narrow. A member of one panel ? not the economics one ? remarked to me that he thought the top Bs were doing the really interesting New Zealand work in his discipline. That may also be true in economics.

Are the PBRF measures any use to a student? They may provide some guidance in later years if a student wants to change departments to do graduate studies. In the interim, the most relevant PBRF measure may be the proportion of staff deemed “research active”, for the university teacher who is doing research is trying to keep up with the moving frontier of the discipline, and likely to be more stimulating than the teacher who is recycling what was learnt years ago.

I am sometimes asked, anxiously, about the amount of mathematics economics requires. Alfred Marshall famously set out the following rules:
“(1) Use mathematics as a shorthand language, rather than as an engine of inquiry.
(2) Keep to them till you have done.
(3) Translate into English.
(4) Then illustrate by examples that are important in real life.
(5) Burn the mathematics.
(6) If you can’t succeed in (4), burn (3).
This last I did often.”

You could not get better advice from a superb mathematician, a superb writer, a superb empiricist and a superb thinker. Sadly, it was recently fashionable to cloak one’s economic inadequacies in obscure mathematics. Things are changing, and most economics departments provide options for the non-mathematical as well as the mathematical. Do as much mathe-matics as you can, and then stop. That will be enough to be a good economist, no matter how little, providing you are a good thinker and clear writer.

Make sure you get a good empirical training, including in statistical methods. The fashion for theory (and policy) without evidence ? popular in the Rogernomics era ? is, I am glad to say, dying. Look for history and behavioural studies, which are currently frontier economic research areas, although you don’t need to do them within an economic department. I greatly valued doing philosophy (and often wish more of my colleagues had done epistemology – the theory of knowledge). Economics is the business end of liberal studies and the liberal end of business studies. Today, economics departments tend to be in business faculties, so look for liberal studies offsets.

A good test is to see how you like the department’s first-year textbook. Most are good, but look where they introduce the international sector. Page 800 of the 1000-page text is no use to New Zealanders, for our economy is dominated by the external sector in a way the US economy ? the main source of textbooks ? is not. (Some departments offset such weaknesses with locally focused additional notes.)

If you don’t enjoy the economics you do, you’ve struck poor teaching. As economics reminds us, customers are the best judge of quality, not some bureaucratically constructed index.