Hands-on help from professors who truly care has been the highlight of accounting PhD student Derek’s Smith’s first three years at Tippie; a lesson he hopes to pay forward as he prepares for a career in academia.
From the mountains to the plains
When Derek Smith was researching places to pursue a PhD in behavioral accounting, he and wife Eva checked out universities in Florida, Alabama, Iowa, and several other states.
Initially, Iowa didn’t sound too appealing, but not due to any fault of the university.
“The day we looked up Iowa, we checked the weather too and it was -40 degrees,” Smith, who grew up in sun-soaked Colorado said. “I learned the word ‘polar vortex.’ I didn’t even know people could live in that kind of coldness.”
But as he dug further into what Tippie had to offer, he figured he could buy warmer clothes but maybe not find a better environment for the kind of research he wanted to do.
“There are two professors at Iowa doing the type of research I am interested in,” he said, speaking of the relatively small field of behavioral accounting. “To have two of them reaching out to me and encouraging me to apply really piqued my interest, despite knowing almost nothing about Iowa.”
Smith’s relationship with that pair of professors – Scott Asay and Mike Durney – has only blossomed since he arrived on campus.
Why people make the investment and financial decisions they do
Behavioral accounting looks at the “why” behind the financial and investment decisions people make. It attempts to help guide people to make better decisions and recognize when and if they are being manipulated emotionally.
“I want to show investors and companies how information can be distorted when you are getting it from intermediaries or middlemen rather than direct sources, even if the underlying facts are the same,” he said.
His favorite part of the work is running real-world experiments with real-world investors.
“Studying how the human mind makes the decisions it does and applying that to business decisions is what I like to do,” Smith said. “I like to go out and get the data myself from real people.”
It helps, he said, to have engaged faculty like Asay and Durney.
“They’re incredible,” he said. “Two things I love about working with them: One, they’re always available for me when I reach out with a question or an idea. It’s humbling when they take the time to sit and talk to me for an hour about my ideas, even if some of them aren’t very good. And two, their ability to take what I say and build it into something better than it is. When they share their knowledge, all of a sudden it goes from a seed of an idea to a really great idea I can run with.”
Smith hopes to pass those lessons forward when he eventually becomes a professor himself. He’s also hopeful his research will help people – particularly everyday retail investors – make better decisions.
“I want to help investors identify the disadvantages they may be facing,” he said. “We want accounting information to be helpful when people invest, not hurtful."
Settling into Iowa City
Despite their initial misgivings, the Smiths have come to cherish the three years they’ve lived in Iowa City while he pursues his degree. Both their daughters – 3-month-old Emery and 2 ½-year-old Palmer – were born here.
“The weather hasn’t even been as awful as we first thought it might be,” Smith chuckled.
“We’ve actually really, really enjoyed it here. People here are open to accepting you into their homes and helping you out.”