Why Does Finance Rule at the College of Business?

The College of Business works a little differently than a lot of colleges on campus.  Before you  become a business major, you must successfully complete a set of lower division courses.  This makes you eligible to be a business student, and typically you then still have 60 credit hours to complete before graduation.  Thirty of those credit hours are the same for everyone.  They include 15 credit hours you must complete before you are admitted into a specific major.  Over the fall and spring semesters, 1,313 students did just that.  The table below shows where those students ended up….

Major Fall ’16 Spring ’17
Finance 191 174
Integrated Business 157 132
Accounting 132 112
Marketing 93 92
Management 71 54
Economics 42 42
Real Estate 12 9
Total 698 615

The numbers are always bigger in the fall, because more students come to us in the fall than do in the spring semester.  That said, the pattern is exactly the same:  Finance is our most popular major.  Integrated Business admits the second most students, followed by Accounting.  Economics and Real Estate continue to be our smallest majors.

Maybe it’s because I was an Economics major, but I’m always surprised at the disparity between Finance and Economics. Finance majors get exposed to a fair bit of economics… they better if they want to know what they’re doing.  And, according to most published reports, Economics graduates typically make a little more money than their Finance counterparts right after graduation. That differential also grows a bit as people get to the middle of their careers. Given the costs of the degree are the same, why wouldn’t Finance majors figure out that Economics is the better investment? Maybe that investments class is too late?  LOL

Then again, people maximize utility, not income… maybe Economics is seen as just too boring and needs a better compensating wage differential to encourage more students to enroll?

My readers have any insight on this?

 

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4 thoughts on “Why Does Finance Rule at the College of Business?

  1. I am a recent graduate with a degree in real estate and most people do not even know that the major is offered at UCF. I believe economics is mostly seen as a research major, where you will be spending your time mostly reading books and contributing to research departments rather than getting a job at an office. I personally saw it that way until I started working at a mortgage bank and multiple coworkers have degrees in economics. I think those degrees are simply not pushed enough for people to consider. I can understand real estate not being popular because of the market crash, people are nervous about going into a field where a market just collapsed.

    I also recognized that whenever I was at the OPD and I heard someone talking about their major, they would actually be pushed to go into IB because of the GPA and because they talk about how it is just business in a broader sense, as if you were going for an M.Ba. I have not once had someone at the OPD mention real estate, and when I have gone they have commented that I am one of the few. I’m very glad I did it, I learned a lot and landed a job in what I wanted to do before I graduated and make a good amount of money because of it.

  2. Dean Jarley,

    I am a pre-BSBA Economics student at UCF and I am a researcher at the Institute for Economic Competitiveness, so I’ve managed to immerse myself in UCF’s economics sphere a little bit, and I have a theory to offer that might answer your question. It has nothing to do with UCF–my experience with the economics program and the IEC has been overwhelmingly positive. However, I was not born and raised near UCF, so I may have some outsider experience to bring to the table. I grew up in Madison, Wisconsin, in the shadow of the University of Wisconsin. It’s a great school–I was forced to choose between it and UCF, and although I’m incredibly pleased with my decision, many of my friends went on to become Badgers. Almost all of them, like me, had hopes of becoming business majors. UW has a very competitive school of business, and direct admittance into the college straight from high school is rare. Even after that, it’s difficult to get in after your freshman year and even your sophomore year (and you’re limited to just two attempts). Unfortunately, many of my friends didn’t get in, even with high GPAs and heavy involvement on campus. Several of them turned to a very common option for those in their position: they became economics majors.

    Allow me to explain. I think UCF is great in that it offers both a B.S. and a B.S.B.A. in Economics. At Wisconsin, there is no “Business Economics” program like the one UCF has. There are many degree programs in the UW College of Business (Finance, Accounting, etc.), but the economics program falls into the realm of the College of Letters and Sciences. That college (and by extension, the economics program) accepts a much higher percentage of students, and thus is much easier to get into.

    The consequence of this system is that the Economics program at UW is filled with business-school hopefuls that didn’t make the cut. The best and brightest Finance hopefuls get into Finance, and the rest fall out of the business program and land in the economics one. At the risk of sounding dramatic, UW’s Economics program is a place of broken dreams and academic failings. Of course, the majority of these are still good students, but they aren’t as good as their counterparts who got into the business school. From my observation, few people choose economics at UW because they love the field–many choose it as a last resort.

    As a result, I feel that Economics is viewed as a second-rate degree in the state of Wisconsin. If many other schools use a system similar to Wisconsin’s, it’s possible a stigma has formed around Economics programs everywhere–even though, as you pointed out, economics graduates tend to earn more. I must admit, having grown up surrounded by this attitude towards economics programs, I thought twice about choosing the economics program at UCF. In the end, my love of the field won out, and I couldn’t be happier with my decision. I simply wonder if others in my position may have been scared off by similar attitudes.

    In any case, I’m very grateful that UCF offers students an econ program with a business core. I feel schools like Wisconsin would benefit greatly from offering similar programs. To me, it’s just another example of UCF overcoming its youth to set an example for others.

    Thanks for sharing, and Go Knights!

  3. Dean Jarley,

    I have recently had to change my major from Economics to Integrated Business mainly due to the lack of available classes during PM hours for those of us who are working professionals. I wonder if that segment of the population who is choosing Finance is doing so for the same reason and if some of the necessary Econ classes were offered later in the day if that disparity would change.

  4. I’m so proud to be a UCF Business Economics graduate. I truly believe other business majors miss out on a great major with brilliant professors and a more holistic view of business: policy, healthcare, environmental issues, public goods. The other majors are more silo-ed, ignoring big chunks of the rest of the world. I also appreciated so many electives which lent variety for every interest. The benefit of the Economics program is that it’s small. This is a huge externality for students to become close to their professors, ask questions in class and engage in more meaningful discussion. I would choose the economics program again and again, I’m in graduate school now in another discipline but I so miss the program.

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