The University of Michigan Department of Economics would like to introduce a new face in the department, Professor Basit Zafar. Due to the pandemic, he has yet to set foot on the Ann Arbor campus, and is currently teaching from Phoenix, Arizona where he had been a professor of economics at Arizona State University for the past 3 years. Before turning solely to academia, Dr. Zafar worked for the Federal Reserve Bank of New York as a research officer and as a senior economist, and was also a visiting professor for the Department of Economics at Princeton University.
Originally from Lahore, Pakistan, Professor Zafar came to the United States to complete his education, receiving his B.Sc. in Engineering and Economics with honors from California Institute of Technology, and then earning his Ph.D. from Northwestern University. Drawn to the University by the large number of applied microeconomists, Professor Zafar also found the high caliber students and the Institute for Social Research enticing. “As its name suggests, ISR has a long history of survey research. A lot of my research uses surveys that I design and conduct myself. At the NY Fed, I helped launch the Survey of Consumer Expectations (SCE), which was motivated in part by the Michigan Survey of Consumers so the strong survey tradition at Michigan is a big pull for me.”
As an applied microeconomist, Professor Zafar is interested in studying higher education, gender differences, household finance, and information frictions. He is currently engaged with several collaborators, looking at the job search behavior of college students. “Employers tend to make exploding offers with short deadlines to college students. If you’re really risk averse or uncertain about how good you are, you may be inclined to accept an offer which isn’t so great. What we’re finding is that women tend to accept jobs before men do. Using rich survey data, we can show this is related, in part, to women being a lot more risk averse, and men being a lot more overconfident.” Though gender differences in behavioral traits have been well documented, “This study illustrates that the phenomenon of exploding offers contributes to the gender gap in starting salaries. We show that a simple policy that allows students to hold on to offers for a month can cut down the gender gap in initial wages by almost two-thirds.”
Covid has also impacted Dr. Zafar’s research choices. Working with colleagues from the University of Arizona, Dr. Zafar recently completed a study that resulted in an NBER working paper, The Impact of COVID-19 on Student Experiences and Expectations: Evidence from a Survey. “Covid is impacting college students and actually worsening socioeconomic gaps in educational outcomes We’re now also doing a project on understanding how much students value in-class instruction and college life -- something that has become quite important in the post-Covid world.”
For his classes, Professor Zafar has specific objects for his undergraduates and graduate students. “I believe students don’t fully realize how economics can inform every aspect of our lives, and that economics isn’t only about the study of the economy. Making students aware of what economists study, or can study, is something I want to be able to communicate to undergrads.” For ECON 490: Experiments in Economics, students can expect to cover economic papers that use some experimental variation to get at the policy questions of interest. “My goal is for students to understand the pros and cons of any research study--no study is perfect. So when they read about research studies in the popular press, they can arrive at their own independent assessment.”
As a class geared for Ph.D. students, ECON 695 will have an entirely different emphasis. Co-taught with professor Andrei Levchencko, the course is designed to help students navigate the process of writing a third-year research paper. “For the grad class, research is a gradual process, and the transition from coursework to research is not that easy. Fundamentally, the goal is to make students think and propose research ideas. Then, they receive feedback from us and others.” Econ faculty are invited to different classes to give feedback on their research, or to discuss other professional issues. Professor Zafar concluded, “The hard part, I think, is to start putting forward ideas. Only some of them will be good, especially at the beginning, but you have to keep trying.”
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