Should I study business or economics?
Are economics more theoretical than business? And how about the career prospects? If you are at the juncture of deciding between economics and business for your university major, Digital Senior would like to offer you some advice on how to choose between these two potentially confusing subjects.
Before we go into the specifics, let us clarify something. Most people find the finance concentration in business confusing with economics. Other areas of the business study, such as marketing, IT or human resource, are very distinct from economics and should not be sources of concerns for you.
Then what are the difference between business with finance specialization and economics? One of the most popular opinions is that economics is more theoretical. Well, both disciplines teach you a lot of theories; and theories being theories, they may not be applicable to the real life problem. In finance, one of the most influential financial theory, the M-M theory, is only valid under more than five restrictive (and unrealistic) assumptions. Same goes for economics, where consumer choice and market structure are more true in textbook than in the real world.
Hence you should not go into the business major expecting to learn things that are immediately transferable to your workplace. The aim of university education is to train your ability to think and learn, and nothing can do a better job than theoretical learning.
Having said that, you are right to say that economics is more theory-driven than business. Economics is at a higher level of abstraction. It is not far from truth to say that business finance derives its insight from financial economics and modify them for the business context. Hence business is more practical in the sense that you will find what you learn in school is relatively more applicable and occasionally what you learn in business finance is indeed what the working professionals are doing on their jobs.
Economics: more mathematical?
Other than the degree of being theoretical, the curriculum structures are also different. In economics, you will need to learn modules that are not directly related to finance, such as international trade or the theory of firm. If you want to learn more things other than finance, or you have yet to decide your area of study, studying economics gives you a good exposure to many more areas. It is also more mathematical in general, as almost every economics module requires a fair amount of mathematics (algebra, differentiation and statistics). If you enjoy working with numbers, you are likely to excel in economics.
Business: get around with maths
In business, however, there are more finance courses available to you. If you want to take more advanced finance courses, going to a business school is a good choice. Of course, those courses will be heavy in mathematics. However, other business modules which you are required to take are not so mathematical or even are writing based. If you are allergic to number and still want to learn some finance, going to a business school is a good strategy.
What can I do with it in the future?
How about career prospect. Let’s face it: your choice of major should be made with your choice of career in mind. Though it is still too early for you to make up your mind, you probably have certain directions in mind. The two majors give you quite different career choices.
In economics, other than the finance industry, you can get into public policy, research or many other areas, such as some international organizations, that requires a good understanding of how companies, markets and people behave. It offers a wide range of jobs, because economics is essentially a versatile discipline that covers many aspects of our society.
In comparison, business with finance major is more focused. Students under that track learn more finance knowledge and are more equipped with working in the finance industry, such as banks, asset management firms and financial regulatory bodies. The more rigorous finance training may make a business graduate stand out compared to an economics graduate when considered for a bank job.
‘So if I want to work in the finance industry, I should take business instead of economics?”‘ This is the question you may have now. This question can only be answered in a larger context. The decision made by a recruiter is always based on holistic consideration: your interview, GPA, major of study, work experiences and activities. A lower GPA can hardly be compensated by a ‘more attractive’ major. Digital Senior has seen students under two categories moving on to excellent careers in finance; and they wouldn’t tell you it is the name of their major that helps them get it.
But if you really press us for an answer, Digital Senior would say that business schools usually have better career resources compared to social science schools to which economics belongs. Business schools are also more aggressive in their branding, so they may enjoy better reputation among employers. That’s as far as the advantage of studying business goes compared to studying economics.
Don’t want to make a choice? Then consider taking a double major or degrees in business and economics. But don’t forget: you will be assessed holistically and you will do well in your study once you enjoy it more.