What is Economics?

Why are some countries rich and some countries poor? How do companies decide to hire workers rather than use machines? What role should the government play in individual investment decisions?

The essential insights of economics are that society's resources are scarce and have a price, that prices provide the link between individual agents (consumers and firms), and that individual behavior can vary considerably across different incentive schemes. Economics provides the tools to analyze the big questions that we face in our lives. Economists apply rigorous quantitative methods and test their hypotheses using data. In so doing they have made great progress in the recent decades in understanding social, political and economic phenomena.

Undergraduate degrees in economics most often lead to employment in accounting, auditing or bookkeeping (22 percent), management (14 percent), sales and marketing (11 percent) and insurance, securities, real estate and business services (11 percent). Experienced workers aged 35–44 with an undergraduate economics degree, but no advanced degree, had median annual earnings in 2011–12 of more than $80,000, which is high compared to graduates of other majors. Students who pursue further study after obtaining an undergraduate degree in economics most commonly enter MBA or law programs.

The principal goal of undergraduate economics education is teaching students how and when to "think like an economist," as economics scholar and author John J. Siegfried observed. Graduates understand that scarcity drives our decision making. When presented with a question, they have the tools to weigh the alternatives and make well-informed decisions. Rigorous mathematically based analysis of models and the testing of theories using data are the key tools learned in a B.A. program in economics. Graduates may apply these tools to business, policy, government and other types of organizations given the great variety of occupations open to graduates in Economics. In the incredibly fast-moving global economy, economists are needed to make sense of consumer decision making, market interaction and the impact of government intervention.

A 2010 survey of 1,072 economics majors at public and private colleges and universities by researcher Steven Jones and colleagues reported that 78 percent of majors were either satisfied (47 percent) or highly satisfied (31 percent) with economics as a major, and only 3 percent were dissatisfied. Asked what they derived from their studies in economics, an overwhelming majority of survey respondents (89 percent) said that they learned the economics way of thinking—a primary goal of the economics major.