Becoming an Econometrician: What You Need to Know
March 10, 2021
If you loved the movie Moneyball—and you love money—consider becoming an econometrician. It's a career that brings empiricism to economics, and it might be right for you if you enjoy sifting through data to find trackable relationships and predictable outcomes.
Economics isn't generally regarded as one of the hard sciences, but that doesn't mean it's impossible to apply quantitative analysis of the economy. Econometrics (also called quantitative economics) is the branch of economics that uses math and statistical methods to predict the business, employment, and societal outcomes of different economic theories.
"Econometrician" isn't a term you'll hear very often outside of economic spheres, but it's not a new one. Polish economist Paweł Ciompa first used the word econometrics in 1910. By the 1930s, important and influential research organizations (e.g. the Cowles Foundation for Research in Economics) were focusing their work on the econometric approach to economics. So why isn't the field more widely known? For one reason, the discipline is often grouped with quantitative finance and mathematical finance at universities and in corporate organization charts. It rarely stands alone on the marquee.
Don't let that stop you from pursuing this career path. When you train to become an econometrician, you'll spend time learning about economic theories while also studying and applying specialized statistical analysis and mathematical concepts. Your job will be to analyze and manipulate data sets to model possible outcomes and make predictions.
You'll probably work at an investment bank or a hedge fund, or you might decide to join the ranks of the academic economists who work at universities. You may be called a quant, an econometric quant, a quantitative analyst, or something else, but your job duties will be the same.
In this article, we'll cover:
- Who becomes an econometrician?
- What do econometricians do?
- The educational commitment to become an econometrician
- Other qualifications required to become an econometrician
- Where econometricians work
- The pros and cons of becoming an econometrician
Who becomes an econometrician?
Anyone who is mathematically minded can become an econometrician, but the people most suited to this profession are usually:
- Logical thinkers
- Very interested in the economy
- Good at data analytics
- Problem solvers
- Great communicators
- Patient and focused
An interest in economics is probably the most essential quality an econometrician can possess. In this job, you'll spend a lot of time exploring how the economy operates, how different variables influence economic outcomes, and how to achieve desired results. The ability to identify the right analytic techniques to solve a problem may be more critical than having major number-crunching chops. You can always learn to use new software or to manipulate equations in new ways, but it's much less easy to learn to think quantitatively.
What do econometricians do?
Armed with advanced degrees in statistics and economics, econometricians work in finance, government, compliance and regulatory affairs, auditing, and academics.
Their day-to-day duties include:
- Collecting and formatting data
- Building econometric models
- Developing new modeling and analysis tools
- Analyzing model performance
- Writing presentations
- Creating interactive dashboards
Data manipulation and analysis will be your core responsibilities when you become an econometrician. You may also spend time constructing and maintaining databases and formulating research-based business or financial strategies.
The educational commitment to become an econometrician
You'll likely need both a bachelor's degree and a master's degree to become an econometrician. With just the former, you may only qualify for entry-level econometrics jobs like statistical assistant, junior analyst, or project assistant. With the latter, you can work as a quantitative analyst, a statistician, a teacher, an auditor, or a data scientist.
The problem is that there aren't that many degree programs focused solely on econometrics. It's common for working econometricians to have pursued bachelor's degrees in mathematics, economics, statistics, actuarial science, or business.
There are, however, a handful of econometric bachelor's degree programs in the US, including:
- The University of Delaware offers an economics BS with an economic theory and econometrics concentration
- The University of Illinois at Urbana - Champaign offers a BS in econometrics and quantitative economics
- The University of South Florida - Main Campus offers a BS in quantitative economics and econometrics
Coursework in programs like these will typically include:
- Applied regression analysis
- Business statistics
- Data analytics
- Econometric analysis and econometric modeling,
- Economic statistics
- Economic techniques
- Financial engineering
- Price theory
If studying at a university with an econometrics major isn't possible, look for economics programs that offer coursework in econometrics, economic analysis, and quantitative analysis.
Once you've earned your bachelor's degree, your next step will be to earn a master's degree. There aren't many econometrics-specific graduate degree programs for students in the US, but many schools do offer a master's degree in economics with an econometrics concentration.
You'll find well-regarded econometrics programs at the following schools:
- The University of Arizona offers a Master of Science in Econometrics and Quantitative Economics (MS EQE)
- The University at Buffalo offers a Master of Science in Econometric and Quantitative Economics
- Cornell University offers an MS in economics with a concentration in econometrics and economic statistics that includes a computer science minor
- Texas A & M University - College Station> offers an MS in economics with an econometrics concentration
Your other option is to look at master's degree programs in quantitative economics. There are a lot more of these programs, and the curriculum will cover most of the same topics.
Some top quantitative economics programs can be found at:
- Columbia University
- Duke University
- Rice University
- Tufts University
- The University of California - Santa Barbara
- The University of Pennsylvania
The best master's degree programs for econometricians will have a computer science and machine learning component because econometricians are often called upon to use SQL, SAS, R, BI tools, and statistical programming languages, or even to develop their own analytical software.
Other qualifications required to become an econometrician
Getting the right education is just the first step. Professional experience is also important. Many econometricians make a point of getting experience in finance between degrees even if that's not where they plan to spend their entire careers. It's a great place to apply modeling skills.
Smart econometricians make a point of taking computer classes in or out of college. Using software to analyze information, make predictions, and visualize data is a big part of this job. You don't have to be a programmer to become an econometrician, but being proficient in one or more programming languages will make you a more attractive job candidate.
Where econometricians work
You won't see many job openings for 'econometrician,' and when you do, they're often paired with a second title like 'software engineer' or 'communications specialist.' Don't worry, though, because jobs for econometricians are out there. You just need to know where to look.
You'll get more leads searching sites like Glassdoor for openings for quantitative economists and quantitative analysts—both of which are roles that econometricians can easily step into. Statisticians and econometricians used to do very different work, but econometricians are increasingly finding ways to use data to model controlled experiments, which qualifies them to work as a statistician in a business or scientific setting.
A lot of different types of organizations need professionals who can analyze economic relationships and create forecasts.
Econometricians work at:
- Accounting companies
- Commercial banks
- Federal government departments
- Healthcare companies
- Insurance companies
- Investment companies
- Management consulting firms
- Pension companies
- Power companies
- Real estate companies
- Research organizations
- Software companies
Should you become an econometrician?
Income is definitely one of the pros of becoming an econometrician. According to Glassdoor, the average econometrician makes $90,150 per year. An economic analyst can expect to make about $80,240, according to Ziprecruiter, while a quantitative analyst will make about $118,652.
Another reason you might want to enter the field of econometrics and statistics (besides a love of economics) is that you want to see economics treated more like the hard sciences. In this career, you'll be using proven principles to make quantitative predictions—something that's not exactly easy in economics. As Max Gulker puts it in an article published by the American Institute of Economic Research, economics is harder than the hard sciences.
"Economics seeks to draw conclusions about systems with immense levels of complexity. Even if an economist knew the needs, wants, and biases of every individual in an economy, market, or even firm, the interaction of that network of moving parts makes it difficult if not impossible to draw hard and fast conclusions."
And yet more and more organizations and businesses are turning toward data for answers they can trust. Empirical inquiry is bigger than ever in economics. Given that, there will probably continue to be a growth market for econometricians, which means your prospects in this field are quantifiably promising.
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