Economics Personal Statement Example 45

US President Harry Truman once demanded a “one-handed economist”. Whilst he was tired of economic advisers telling him “on the one hand” and “on the other hand”, it is exactly this endless debate, of competing theories, policies and objectives, that has driven my passion for Economics. One such debate is how best to intervene in market failure and thus, ensure an efficient allocation of resources. Concerned by the market failure in housing, I read Ryan-Collins’ ‘Rethinking the Economics of Land and Housing’ and learnt that Land Value Tax disincentivises the use of land for speculation and incentivises improvements like housing, increasing supply and reducing prices.

I found this to be an effective tax as it cannot be easily evaded. Always looking for ways to apply economic theory to the real world, I found market failure at my job in childcare. I learnt that the government’s intervention, 15-hour free childcare, is unaffordable for many firms and I believe this has led to a contraction in supply, exacerbating the failure. This job also helped me develop my organisational skills as I juggled the commitment with schoolwork and extra-curricular activities.

Achieving the highest score in my year in the UKMT inspired me to capitalise on my mathematical ability by taking Further Maths at A Level. I have enjoyed using differential equations to understand real-world dynamic systems. Finding the econometric content in A Level Economics lacking, I looked elsewhere for the convergence of my two favourite subjects. Notably, I learnt how to prove the existence of general equilibrium mathematically via the Arrow-Debreu Model. I have kept my mathematical skills primed in my gap year by working through Renshaw’s ‘Maths for Economics’. I have since used the cobweb model to demonstrate price fluctuations and have shown how, in divergent cases, markets may never reach an equilibrium price.

I have also learnt to use integration to calculate consumer and producer surplus, an important tool when conducting Cost-Benefit Analysis. An opportunity to pass on this love of maths came when I helped organise a Maths Activity Circus, now a regular feature at my school. Intrigued by Game Theory, I read Dixit’s ‘The Art of Strategy’ and learnt how to find the Nash Equilibrium, much improving my ability to resolve the prisoner’s dilemma. Moreover, I have since utilised backward reasoning to negotiate a pay rise with my employer.

Work experience at an investment company gave me an insight into the financial sector and a possible career path. I became familiar with financial concepts and vocabulary, allowing me to regularly read publications like the Financial Times. I criticised the Efficient Market Hypothesis as stock market bubbles like the Dotcom Bubble show that stocks can be largely overvalued and thus, need active management to maximise returns. Learning that stocks could be mispriced due to cognitive biases introduced me to behavioural economics. I have since read Kahneman’s ‘Thinking, Fast and Slow’ and found the Endowment Effect to be a fascinating rebuttal of rational economic theory, contradicting the idea that a consumer values a good the same, whether considering its purchase or sale.

During my gap year, I have had time to mature and reignite my enthusiasm for learning. I am spending time working, travelling, attending lectures at the LSE and participating in local politics. I gave a presentation to my borough's Labour Party on the growth of the far-right in Europe, arguing that falling real incomes and stagnant growth had led to calls for radical economic and social change. This reinforced the confidence and presentational skills I gained through years of partaking in debate and public speaking clubs. Taking economics at university will ultimately help me to explore the economic riddles of the day and provide me with a platform to sculpt, put forth and add to my own ideas.