Rate of Return to the Ph.D. in Economics: Reply.

The article presents the author's comment as a reply to the article on rate of return to the doctor of philosophy degree (Ph.D.) in economics. Writer Robert Staaf indicates reservations about the validity of two assumptions, which the author used to construct estimates of the rate of return to the Ph.D. in economics. In particular, Staaf takes exception to the author's estimates of the time necessary to acquire a Ph.D. in economics and is disturbed by the author's failure to consider attrition rates in the rate-of-return estimates. Unfortunately, data useful for evaluating the importance of errors in the calculated rates of return resulting from either an improper estimate of the length of schooling or the omission of attrition-rate considerations are scarce. Staaf provides scattered evidence supporting his contention that the author's estimates of four years of schooling for those students supported by assistantships and three years for those students who are self-supporting or granted fellowships are too low.