Rephrasy vs WriteHuman

For years, I thought that I wanted to go into economics, because economics attempts to answer questions about human decisions. Then I realized that it wasn't really about human decisions, it was all about the phenomenon of supply and demand. Supply and demand are really helpful to understand how markets work, but they can't really answer questions about why humans decide anything at all. Yet, the study of economics is so pervasive and successful, that I wondered if there could be a way to incorporate "how we make decisions" into a system.

In my undergraduate studies, I delved into the burgeoning literature around decision theory, the psychology of how people view risk and reward, and the simple mathematical models that ascribe numbers to the former and the latter. Then I encountered actual people, who proved to be stubborn and messy, consistently making decisions that did not adhere to the models. Rather than assuming people are rational and that they only need more and better information, I found the best way to understand people's decisions is to put them under the microscope.

That curiosity brought me into the world of behavioral economics, where economics and psychology meet in a quest to understand and explain human behaviors that, at first glance, seem strange and irrational. Such subtle nudges affect how we save for the future, spend our money, and make choices in our day-to-day life. Behavioral economics brings about a new theoretical model of how people behave.

Behavioral economics appeals to me because it steps beyond the imaginary blue box of traditional economics. I hope to study human behavior because each individual is more than a statistic, existing in a complex web of cultural and social realities that traditional economics neglects.

A graduate degree, I believe, will train me to measure and predict behaviors and then translate my research into solutions. That lets me respond to fundamental questions: In which contexts do these behaviors arise?

I’ve learned that traditional economics is based on rational, utility-maximizing agents. This led me to believe that people are logical and derive their actions based on expected and fine-tuned trade-offs. Quite the opposite is true. For example, people hoard supplies during a recession. Investors hold on to losing investments. Employees forgo retention bonuses. All of these illustrate people’s propensity to take sub-optimal actions andderive utility in the short-run at the expense of the long-run. People often prefer to receive a small utility today over a larger utility tomorrow. Again, behavioral economics is rich with examples of these discrepancies and inequities. From an academic standpoint, behavioral economics fills gaps found in traditional economics.

My interest in behavioral economics was sparked during my undergraduate years with my increasing frustration with economics being a science where assumptions could not be tested and validated. People aren’t perfect utility maximizers. Thaler’s mental accounting provides insights into individuals’ financial choices that are otherwise puzzling. People view financial wealth differently based on its source. A paycheck and tax refund are considered differently. In the same vein, if we are to understand, model and alleviate market inefficiencies, we must understand the true nature of people’s financial decisions as opposed to prescribing and projecting our preconceived notions.

This interest has Deepened my analysis of integration of behavioral economics and policy. The usage of behavioral economics has the potential to help and benefit the public in several ways such as optimizing the level of financial savings and also altering public energy consumption to more sustainable sources.

At your institution, my main objective will be to adopt several behavioral economics tools to assess public policy. I will particularly focus on public health and welfare policies. Your emphasis on experimental economics and field research will give me an opportunity to assess the role of behavioral economics and cognitive biases in public policy to reduce wealth inequality and promote financial accessibility.

My main interest in economics is to look beyond the traditional assessment of public welfare and health. Behavioral economics is integrated with a number of allied sciences. Therefore, I believe that furthering my education in behavioral economics will help in understanding several unexplored public policies and benefits. Ultimately, behavioral economics will assist in public policy formulation to positively alter public welfare and health.