Rewarding Mathematics

We hear a lot about how talent will leave the major financial centres if taxes or regulations become unacceptable. That people move to more favourable locations is more or less plausible. But what seems to not ever be asked is how much talent does this “talent” really have?


Combine this with what I have often said, that the mathematics of quant finance is straightforward if approached properly, and the following idea immediately suggests itself: Measure the ratio of typical salary in a quantitative field to the difficulty of the mathematics in that field. How much better off is the quant compared to the aeronautical engineer?

And does salary correlate with talent?

Quantifying the math difficulty, for the denominator in the ratio, is the hard part. Inspired by the kind of differential equations seen in many physical sciences as well as in finance we could start as follows.

Parabolic equations 5 points; elliptic 10; hyperbolic or mixed 15.

Four or fewer dimensions 5 points; five or more 10 points.

Linear no points; nonlinear 10 points.

The aero engineer might have a ratio of 5 (after rescaling by 1,000 to make the numbers neater), the quant a whopping 30.

In other words the aero engineer ought to be on the quant’s salary and vice versa.

P

Total Views: 74 ,

Related Posts

At Last: Education, Education, Education Theresa May wants to bring back grammar schools. According to one poll 60% of the British public agree with this idea. If I'd been asked I would have ...
“Algo My Way, You Go Your Way” My upcoming talk at the Quant Insights conference, 14th October, London, will be "Algo My Way, You Go Your Way - Four Decades in Business." More detai...
All Mod Cons For the UK and wilmott.com it's that once-in-a-generation moment. A new bathroom? No! While Mark Carney performs his fine balancing act of talki...
Sir Bob Geldof, We Who Are About To Thrive Salute ... A big, big thank you from those of us who wanted out of the EU to: Lord Stuart Rose, leader of the Remain camp, for his timely confession Da...
How I Successfully Forecast The Result Of The EU R... Gosh, this is embarrassing. I seem to have done the double. This is a sequel to my blog from last year How I Successfully Forecast The Results Of T...
A Proper Analysis Of The EU Referendum Polls I've been following the polling with obsessive interest. And finding the analysis somewhat feeble. I'm going to very quickly address the topic of poll...
Things That Haven’t Been Said About The EU R... Debate? Debate?? They don’t know the meaning of debate! The two sides have both in their own ways been like broken records. The same old arguments ...
Why I And All My Rich Pals Are Voting To Stay In T... I’m relatively rich. I can afford private healthcare. I don’t have to worry about long waiting lists for operations or the impossibility of getting...