Unhedged economists are vulnerable economists
People the econ job market is pretty good. So it seems surprising that the University of Florida is defunding, and thus effectively killing, their PhD program in Econ as reported here.
But, it is perhaps not so mysterious when you consider the unhedged financial position of that department. As the article points out, it generates a lot of credit hours and tuition money from its classes, but most of those hours come in the Arts and Sciences College. Meanwhile, the Econ department is in the business school.
So its revenues accrue to one accounting unit while its costs are borne by another. No wonder the department has shrunk from 38 to 11 and there are plans to shrink it further still to 6!**
This is a classic case of unhedged risk, the academic equivalent of a firm who earns its revenues in Pesos but pays its costs in Dollars.
Note that the department was offered the option of moving to Arts & Sciences, "where, deans say, the Ph.D. program might have survived. The faculty voted not to move because, they say, the liberal-arts college has its own financial problems, and they were concerned about salaries, research budgets, and teaching loads."
My department at OU was in the B-school back in the day and faced a similar situation. They decided to move (or got kicked out, depending on who is telling the story) to A&S and our program lives to this day!
**Mrs. Angus says that if she was one of the 11, she'd be very careful about accepting a drink or any food from the B-school dean!
Hat tips to PrisonRodeo and RKG