Economics seeks to understand choices and their consequences. Why save rather than spend? Why put certain products on sale and charge top dollar for another? Why purchase instead of rent? Researchers and students at the Stanford Institute for Economic Policy Research (SIEPR) choose to examine the world and make an impact through the prism of economics. In this ongoing series, we’ve asked them one question: Why econ?
Heidi Williams started thinking like an economist as an undergraduate student. But it wasn’t an econ course that inspired her. It was a discussion in biology class about the developing world’s struggle with malaria.
“The fact that malaria is a problem in poor countries but not rich ones intrigued me, and I started doing some research,” Williams says.
That led her to discover a paper by Michael Kremer, an economist who would later become one of her mentors and a 2019 Nobel Prize winner. Kremer’s paper proposed a way for governments and private foundations to incentivize drug companies to develop malaria vaccines. His work essentially made the case that a compelling solution to curbing the disease could exist in the marketplace. Williams was hooked.
“I immediately realized that economics has a natural language and toolkit for addressing important social problems in a really practical way,” Williams said.
After graduating from Dartmouth as a math major, Williams headed to Oxford for a master’s in economics. She then received her PhD in economics at Harvard, and focused her research on the causes and consequences of technological change, particularly in health care markets.
Her work earned her a MacArthur “genius grant” and an Alfred P. Sloan Research Fellowship during her tenure as an economics professor at MIT. After two separate stints as a faculty visitor at the Stanford Institute for Economic Policy Research (SIEPR), Williams decided she wanted to make her academic home here. She joined the Stanford faculty in 2019 as the Charles R. Schwab Professor of Economics and is one of SIEPR’s newest senior fellows.
Along with her robust research agenda, Williams is also committed to encouraging the next generation of economists and working with students who are — as she puts it — “save-the-world types” wanting more experience before committing to a career in economics.
“I’m looking for students who have a passion for really making a difference in the world,” she says. “Just about anyone can learn the skills and tools of economics, but the passion is what is most important.”
Being a doctor and caring for patients, one-by-one, is a rewarding career. But what if your profession can improve the lives of many people, all at once?
That humanistic challenge is what inspired David Chan to take a hiatus from medical school to get a master’s in health policy — and a master’s and a PhD in economics — before completing his MD. And it’s what motivates him today as he juggles being an economist, doctor, and professor.
“The thing that appealed to me about economics is how you can help large groups of people as opposed to just the person in front of you,” Chan says from his office at Stanford Health Policy, a short walk from SIEPR where he is a senior fellow.
“Economics is fundamentally about people — the fact that people drive things, and we are designing policies to make the welfare of people better. That’s also something that we share in medicine — the business of helping people.”
No surprise — Chan is a health economist. And he is amid a growing group of economists developing groundbreaking insights into the delivery of health care.
“We know so much about the financing of health care from decades of research, but there's just a dearth of research in the delivery of it,” he says. “And now that we have a wealth of new data to start studying this, we can open the black box and literally ask why some hospitals spend less but have much better outcomes. We can really see what people are doing inside these hospitals.”
Chan’s research projects, for example, have found how emergency room doctors are more likely to quickly order costly tests when they’re about to end their shifts, and that the typical practice of relying on triage nurses to assign patients to ER doctors is far less effective than doctor-managed assignments.
In another study, Chan found significant cost differences between pneumonia cases handled by lower-skilled versus higher-skilled radiologists. The findings suggests more uniform policies for training.
“The currency of moving policy forward is increasingly going to be in the hands of those who can make recommendations based on data and analytics, and economics is definitely a field that has kept pace with that,” he says.
Bessie Zhang’s eyes light up when she talks about currency swaps and financial instruments. But it’s not money that excites her. It’s what’s behind it all that intrigues her.
Ever since the Stanford sophomore read “Sapiens: A Brief History of Humankind” in high school, she has been captivated by the notion of the trust and value people put into a piece of paper with George Washington’s face on it. The book, which explores how the imagination makes humans more powerful over other animals, anchored her passion for economics.
“Econ signifies to me why we, as a group of animals, are much more powerful. It’s because of this imagination and these complicated webs we’re able to create,” she says. “Then what fascinated me more was how in this web we created — of credits, of trust, of exchange — we still don’t completely understand it. We try to predict it, but no matter how close we get to the predictions, this thing always morphs into something else.”
In high school, Zhang couldn’t get enough of econ, so she ventured to the nearby University of Chicago to take macroeconomics on top of the AP microeconomics course offered at her school. And she co-founded the school’s first economics investment team to compete at policy debate tournaments across the U.S. and help expose peers to the fact that economics is about behavior and decision-making as much as it is about dollars and markets.
By the time she was 18, Zhang had an array of economic-related notches on her belt. Economic policy debate champion. Research intern at a futures exchange company. Youth diplomat — leading economic-focused workshops as an ambassador of Chicagoland for the U.S. Department of State. And a modeler in international and local mathematical modeling contests.
During her first year at Stanford, Zhang’s economic horizons broadened. Her Thinking Matters class was on cancer, and she wrote her paper on the health care system and cancer treatments. This past summer before starting her second year at Stanford, she worked both as a finance research assistant at the Stanford Graduate School of Business as well as an intern at a hedge fund.
“I like to incorporate econ in my life,” she says. “It’s so broad I can apply it to everything.”
Zhang feels lucky she knew at an early age how studying economics would be a foundation for her endeavors. Now — as she gets guidance from her public policy and applied math professors — it’s a matter of deciding a path to pursue.
Valerie Scimeca’s first lesson about an economy came in the third grade.
But it wasn’t a teacher’s assignment that made much of an impression. Rather, it was the struggles she saw her father having with his real estate development business. The year was 2007, and the Great Recession was just hitting.
“Economics wasn’t this distant idea from my third-grade report, it was very real,” she says.
Today, as a graduating senior and co-term master’s student, Scimeca’s view of economics — what she considers the science of decisions — is far more sophisticated. When she took Econ 1 during her first year at Stanford in 2016, she immediately knew economics would be her major.
The Illinois native — the first in her family to go to college — had been initially considering going into computer science. But the introductory econ course won her over. The concepts of the discipline resonated with her, everywhere in life.
“They say I could have already gotten an entry-level job at Google after I finished CS106B, but it was the ideas of econ that kept rattling around in my mind — probably because the things I was learning were providing explanations for the world,” she says.
Scimeca also found it rewarding to work as an undergraduate research assistant at SIEPR. The experience exposed her to empirical research on life expectancy rates, and health and labor gaps.
“There are real people at the end of that data,” she says.
Scimeca, who is getting a master’s in Management Science and Engineering and pursuing a career in finance, says her studies in economics have equipped her with a problem-solving foundation.
“I'll probably never need to draw a supply-and-demand graph in 20 years, but it's that framework that lets you think about the world in a different way, in a deeper way,” she says.
“I’m recommending econ to everybody. You can find the things in econ that click with you because you could use it for everything, and you can supplement anything you study with econ. It’s very versatile.”
Levi Boxell grew up wanting to be an engineer or a computer scientist. But his career path took a turn toward economics during his senior year in high school when perspectives of poverty and the role of economics research began to swirl together.
His father started a new fundraising job working at a community center in a low-income area of Indianapolis. Around the same time, Boxell was in a required economics class and landed an internship at a think tank to do research on international development issues.
A new interest in finding solutions to poverty set in and led Boxell to major in development economics and math at Taylor University.
“Economics gives you a set of tools to think about and understand the world,” he says. “And a lot of the Econ 101 topics — such as thinking on the margin, ignoring sunk costs, and diminishing returns — I find useful for thinking about decisions outside the academic realm in day-to-day life.”
Now, as an econ PhD student at Stanford, Boxell says — without a doubt — that economics suits him. He’s a National Science Foundation Graduate Research Fellow. He was among the first predoctoral fellows at the Stanford Institute for Economic Policy Research (SIEPR). And he was awarded the McKinnon Memorial Fellowship by the Stanford King Center on Global Development.
“I find working with data easier than working with people, so that matches my personality, I guess,” he says. But more importantly, Boxell appreciates how tying empirical economic analysis to answering important questions provides an approach to solving some big problems.
“A lot of it has to do with choosing the right questions, then presenting the results in a manner that’s easily understood by people who might not have training in economics,” he says.
Crunching through mounds of data as a SIEPR predoc — which led to co-authorship of two widely cited papers on America’s growing political polarization — further fanned his passion for studying political economy.
His current research focus is on the interplay between conflict, information technology, polarization and development economics.
“It’s exciting to see how research can kind of shape the public discussion on these topics,” he says.
Nina Buchmann’s interest in global economic inequality and its relationship to gender took root early.
Her family was living in civil war-torn Sri Lanka when she was born, and the exposure to economic disparities and the surrounding violence compelled her, years later, to work in the slums of India after high school for an NGO that assisted women and children with HIV.
And when Buchmann did her undergraduate education, she planned to study international relations with the idea of launching a career fighting war crimes.
But after some friends encouraged her to take an introductory econ class, she found a different way to make an impact.
“I loved the course. I loved the empirical and evidence-based approach to poverty and development,” she says. “So I knew I would still do development, but I would be an economist — a development economist.”
The tools of economics, Buchmann says, open up different ways of examining very specific issues.
Buchmann followed her bachelor’s degree in economics with a master’s in development economics. In between that time, as she worked as an analyst at the trade and development arm of the UN, the prevalence of violence — including violence outside of war — resurfaced on her radar.
After getting her master’s degree, Buchmann turned to doing research at the Jameel Poverty Action Lab (J-PAL) at Duke University. And now, as a graduate student at Stanford, Buchmann has garnered a “best paper” award and research fellowship grants from SIEPR and the Stanford King Center on Global Development among others for her projects that seek to shed light on factors behind discrimination and domestic violence.
“Understanding why violence decreases with income is key to identifying interventions,” Buchmann says.
The bulk of her work has thus far focused on evidence from Bangladesh, but Buchmann sees gender discrimination across rich and poor countries alike.
“If there’s something you think is important, and you think people should think and do more about it, you can study it,” Buchmann says. “I think I want to keep doing that.”