Three U.S.-based academics won the 2021 Nobel Prize for economics for work using experiments that draw on real-life situations to revolutionize empirical research.
David Card at the University of California Berkeley, Joshua D. Angrist of the Massachusetts Institute of Technology and Guido W. Imbens at Stanford University will share the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, officials of the Royal Swedish Academy of Sciences announced in Stockholm on Monday.
“This year’s economic sciences laureates have demonstrated that many of society’s big questions can be answered,” the academy said on Twitter. “Their solution is to use natural experiments -- situations arising in real life that resemble randomized experiments.”
Angrist and Imbens specialized in developing such methodology, while Card used this approach to address key questions in labor economics.
Research examples cited by the academy include his analysis of the Cuban influx into Miami’s labor market during the 1980s after the country’s then-leader, Fidel Castro, permitted citizens who wanted to leave the island to do so.
Another study mentioned was Card’s paper together with Alan Krueger, the late economist and onetime adviser to President Barack Obama, that compared the effects of minimum-wage policies in fast-food restaurants in Pennsylvania and New Jersey. Imbens, speaking on Bloomberg Television, highlighted Krueger’s contributions alongside the winners’ work.
Questioned about the role that certainty about data plays in economic forecasting, he said that’s something he wonders about a lot.
“Traditionally we’ve certainly erred on the side of putting too much faith in the models,” Imbens said. “So a lot of the methods I’ve been developing have been trying to get away from that and trying to make these methods more robust.”
The professor didn’t hear the phone ring when contacted in the early hours of his morning in California about having won the prize.