Behavioral finance studies the effects of human emotions and behavior on the financial market. Students explore the human psychology behind the decisions made by investors and finance professionals and discover the ways in which these decisions affect prices, risk, resources, distribution, and other aspects of the economics and finance field. At the graduate level, students in business, finance, or economics programs may pursue research in behavioral finance.
Degrees in Behavioral Finance
Requirements for enrollment can vary depending on the type of program. Bachelor's degree candidates can apply with a high school diploma or two-year degree. Master's level applicants must have earned a bachelor's degree with a minimum grade point average and should have taken the Graduate Management Admission Test (GMAT) or Graduate Record Examination (GRE). While being taught the basics of behavioral finance, as well as the various theories and strategies used in trading and investment, students will learn to combine basic psychological principles with this knowledge. Since behavioral economics and behavioral finance overlap, many courses combine both elements. Topics in a behavioral finance program include:
- Decision-making psychology
- Financial markets psychology
- Behavioral features of corporate finance
- Behavioral economics
- Technical analysis
Graduates with an education in behavioral finance can find job opportunities in several financial fields. These include:
- Investment banking
- Investment management
- Sales and trading
- Corporate finance
- Venture capital
Employment Outlook and Salary Information
Individuals who earn a minimum of a bachelor's degree in finance can become financial analysts. The U.S. Bureau of Labor Statistics (BLS) reports that over 329,500 professionals worked in this field as of 2018, and that number was projected to grow 6% by 2028, which is faster than average. As of 2018, financial analysts earned median annual salaries of $85,660, according to the BLS.
Behavioral finance is a relatively new field and is usually taught either as a single course or as part of a degree program. Even so, there are a few schools that offer a concentration in behavioral finance or the closely related field of behavioral economics as part of larger degree programs.