Describe the unique qualities that attract you to the specific undergraduate College or School (including preferred admission and dual degree programs) to which you are applying at the University of Michigan. How would that curriculum support your interests?
Economics is not just a subject to me; rather, it is a theory about our thought processes and behavior as human beings, and our organization as a society. Ever since I started studying Economics, I have seen it more as a chance to study the world and its people rather than money.
In particular, behavioral economics, such as game theory, decision making, and collusion theory, are endlessly fascinating to me because they attempt to model perfectly rational behavior against human irrationality in the real world. For example, why do we have the tendency to “splurge” on lavish meals while also slaving to save minuscule amounts of money by stocking up on soup coupons? Perhaps even more relevant to me is a recent trend in the fashion industry, where selling articles of clothing for hundreds - if not thousands - of dollars does not turn away consumers, but attracts them. Since becoming aware of this phenomenon, I have studied and tracked the pricing mechanism, advertising mechanism, and social media responses of new developments in the fashion industry. In the past five years, I have noticed that the social media responses almost directly parallel the performances of the said aforementioned developments in the market. In addition, I have observed that limiting supply is one of the most effective methods in hiking up retail and resale prices of goods, which parallels exactly the monopoly theory in economics.
But economics is not all theories. Economics’ practicality in the real world really struck me for the first time when I saw people complaining about progressive tax systems (higher tax rates at higher brackets of income) on an online forum. In particular, I remember many expressing outrage at “being punished” for earning more and claiming that everyone should be taxed proportionately. What these people failed to understand, I thought, was that such a tax is regressive because people with lower salaries have less disposable income. With further reference to my observations in the fashion market, I would compare this to people expressing outrage at having to pay hundreds of dollars for shoes or having to buy them from retailers at triple the price. Of course, the price of a good is not a matter of its production value; it directly correlates to the amount people are willing to pay for it.
Having witnessed such opinions borne of financial illiteracy, I desire to gain more knowledge both about economics and about the way society is structured. Aside from the practicality of having the general knowledge, I may seek to combine my passion for economics with my interest in the fashion market, as it exemplifies an ever-changing industry which does not stagnate. Furthermore, it is an industry which combines my artistic ability with my passion for economics. Ultimately, I wish to go to America to study economics because of the gateway it will open for connections and the opportunities it will provide to learn about industries outside of New Zealand.