Have you ever regretted an impulsive purchase, or wondered why you keep putting off that exercise program? Behavioral economists combine mainstream economics, psychology and sociology to figure out how people make decisions about everything from purchases to personal health, including our dismaying tendency to act for immediate gratification rather than long-term good. There are a number of careers where behavioral economists can use their knowledge of human behavior to make an impact.
Many types of companies, from financial firms to advertising agencies, hire behavioral economists – either as staff or consultants -- to forecast sales and predict business and other economic trends. Behavioral economists may work as marketing consultants, advising on everything from how products are packaged and displayed in a store to how they are advertised and priced. They also work in the financial sector as corporate economists, consumer modelers or financial analysts, helping investors and corporations make smarter financial choices.
An individual with a Ph.D. can work as head of a university research lab or project, analyzing statistics and designing studies that help solve complex social problems. At the University of Pennsylvania Center for Health Incentives and Behavioral Economics, for example, behavioral economists are researching ways to get people to make better health-care decisions. Researchers at University of California-Berkeley are studying financial markets of the 1930s and comparing mortgage lending practices of that time to the present day.
Those with master’s or bachelor’s degrees who are interested in research can work in university labs, participating in research gathering and statistical analysis as research assistants.
As behavioral economics increases in popularity with students, there is a growing need for knowledgeable people to teach this discipline. Holders of doctoral degrees may become economics professors at universities, specializing in subjects such as behavioral decision-making and social psychology. Those with master’s degrees can teach these same topics at a less advanced level at community colleges.
Within the federal and many state governments, behavioral economists work as advisers on economic and public policy, suggesting practices that help “nudge” consumers to make smarter decisions about energy consumption, mortgage borrowing, healthcare and retirement saving. The U.S. Office of Management & Budget, The White House Council of Economic Advisers and the U.S. Treasury Department all employ behavioral economists.
These economists have suggested regulatory initiatives that encourage people to apply for college financial aid by simplifying the application forms, or increase retirement savings by having businesses enroll employees automatically in 401(k) plans.
Most jobs in behavioral economics require an advanced degree. A bachelor’s degree in economics, business, psychology or sociology is usually required for admission to a graduate program in behavioral economics.
A certificate in behavioral economics can enhance job prospects for people with bachelors' degrees and some experience in the finance or business sectors. People with this certification find work as financial analysts, corporate economists and market researchers.
According to a 2009 “US News and World Report” article, the job outlook for economists is strong -- particularly for those with doctoral degrees. The American Economics Association listed approximately 2,200 job openings worldwide in 2009, while U.S. universities granted only 950 Ph.D.'s in economics that year, suggesting full employment.
It's clear that behavioral economists are increasingly in demand as government and industry recognize the importance of understanding the human decision-making process.
- Stockbyte/Stockbyte/Getty Images