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Sop 2

Uploaded by

Rani Patil
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STATEMENT OF PURPOSE

Benjamin Davies
Economics PhD applicant

I am fascinated by how theoretical and empirical models can be used to analyse how people behave
and interact. I developed this fascination during my undergraduate studies in economics and
mathematics, and through collaborating with economists on theoretical and empirical research
projects. My strong academic background and research experience position me well to thrive as an
economics PhD student at Stanford University.

I studied at the University of Canterbury for four years, earning a bachelor’s degree with majors in
economics and mathematics. My undergraduate coursework included multivariable calculus, linear
algebra, real analysis, microeconomic theory, financial economics, econometrics, and statistical
inference. I also took graduate-level courses on dynamical systems, stochastic processes, numerical
optimisation, functional analysis, microeconomic theory, and financial economics. I was the top
student in my economics and mathematics cohorts, and I graduated with first class honours. I also
won the Sir Frank Holmes Prize for being New Zealand’s top undergraduate economics student.

I enjoyed combining the rigour of mathematics with the behavioural insights of economics. I
particularly enjoyed my financial economics courses, which used mathematical models to study
how people make choices under risk. Consequently, I wrote my honours thesis on a variant of
Dionne and Eeckhoudt’s (1984) two-period model of insurance and precautionary savings. My
thesis compared the comparative statics of insurance demand with and without access to riskless
savings. It won the Seamus Hogan Memorial Prize for the best honours or master’s thesis in
economics at Canterbury. I presented my thesis at the New Zealand Association of Economists
conference, where I won the Jan Whitwell Prize for the best paper presented by a current or recent
student. Writing and presenting my honours thesis was a rewarding opportunity to conduct and
communicate independent research.

Before my fourth year of study, I completed a summer research project with Professor Richard Watt
on aggregating risks prior to buying insurance. Arrow (1963) shows that consumers prefer single
contracts written on aggregated risks. In contrast, real-world insurers typically offer multiple
contracts written on disaggregated risks. We developed and simulated a theoretical model to
compare social preferences among contract types, and we found that disaggregation can be
Kaldor-Hicks efficient if consumers are sufficiently risk averse. I presented our results at the
European Group of Risk and Insurance Economists conference in London, England, at which I was
the only undergraduate student. Attending this conference allowed me to interact with, and learn
from, world-class economic researchers using theoretical models to form empirically testable
hypotheses. These interactions inspired me to pursue an academic career in economics.

Benjamin Davies — Statement of Purpose Page 1 of 2


Since completing my degree, I have worked at New Zealand’s top-ranked economic research
institute, Motu, as a full-time research analyst. I joined Motu to strengthen my empirical skills, and
to gain experience being involved in research projects from data cleaning to publication.

My first project, on which I worked with Senior Fellow David Maré, involved analysing whether
local clusters of related activities promote urban employment growth. In theory, such clusters foster
innovation by bringing together people with complementary skills, which, in turn, promotes
employment growth as competitive forces reallocate employees into more valuable activities. We
tested this theory using historical census data and found that it holds in large cities only. This makes
sense because larger cities provide more opportunities to interact with people with different skills
and, consequently, more potential for relatedness-driven growth. I enjoyed working on this project
because it allowed me to combine mathematical models with careful empirical analysis. It also gave
me experience overcoming the practical challenges of empirical research, such as working with
suppressed data and time-varying classification systems. With our manuscript invited for
resubmission at Regional Studies, I hope to continue adding to the body of knowledge on how local
interactions contribute to economic growth and innovation.

My current project at Motu, on which I am working with Professor Adam Jaffe from Brandeis
University, involves analysing the interaction between research funding and collaboration.
Researchers with more co-authors may be better at forming productive teams and, consequently,
more likely to attract funding for team-based projects. At the same time, getting funded may
increase researchers’ perceived quality and, consequently, attract co-authors. Our goal is to isolate
these two causal channels and estimate their effects. Working on this project has given me
experience forming research questions about causal relationships, linking data from disparate
sources, and developing econometric models with longitudinal network data. It has also given me
experience working as a member of an international research team. I am looking forward to
engaging with, and contributing to, the international economics research community throughout
my career.

Given my research experience and current interests, the areas in which I see myself most likely to
pursue my PhD are financial, urban, labour and innovation economics. Two topics that particularly
interest me are the incentives and mechanisms underlying team formation, and how scientific teams
contribute to innovation and knowledge diffusion. However, I am aware that my interests may
change as I discover new research questions during my graduate studies. Therefore, I remain open
to new options.

I am excited to pursue an academic career conducting independent research, collaborating with


other researchers, and teaching undergraduate and graduate students. Completing a PhD at
Stanford University will provide a strong foundation for succeeding in this pursuit and for making
a significant contribution to the field of economics.

Benjamin Davies — Statement of Purpose Page 2 of 2

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