Economists David Card, Joshua Angrist and Guido Imbes on Monday called for “natural experiments” to lead “natural experiments” to show real-world economic impacts in regions from the US fast-food sector to migration from Castro-era Cuba on Monday. won the Nobel Prize.
Unlike medicine or other sciences, economists cannot conduct rigorous controlled clinical trials. Instead, natural experiments use real-life situations to study the effects on the world, an approach that has spread to other social sciences.
“His research has greatly improved our ability to answer important causal questions, which has been very beneficial to society,” says Peter Frederickson, chairman of the Economic Sciences Prize Committee.
The last Nobel Economics prizes have been dominated by American institutions and this one was no exception. The Canadian-born Card currently works at the University of California, Berkeley; Angrist at the Massachusetts Institute of Technology; and Dutch-born Imbens at Stanford University.
Question about cause and effect
An experiment by Card in the early 1990s on the effect of a minimum wage increase on the fast-food sector in the US state of New Jersey prompted a review of the conventional wisdom that such an increase should always lead to a decline in employment.
Another studied the impact of a move by Fidel Castro in 1980 to allow all Cubans who wished to leave the country to do so. The card found no negative wage or labor impact for Miami residents with lower levels of education, despite higher ensuing migration to Miami.
“Many important questions are about cause and effect. Will people become healthier if their income increases. ..does the lockdown reduce the spread of infection?” Nobel panelist Eva Mork said.
“This year’s award winners have shown that it is still possible to answer these broad questions about cause and effects and that the way to do so is by using natural experiments.”
Mork, a professor of economics at Uppsala University, said the pandemic had created room for a good natural experiment on education outcomes because of the different disruptions for children in different school years, but whose birth time is only hours in some cases. was different.
“So here, nature has given us an experiment that makes it possible to answer questions that would not have been possible to answer,” she said.
The committee noted that natural experiments were difficult to interpret, but that Angrist and Imbens had solved methodological problems in the mid-1990s to show that accurate conclusions about cause and effect could be drawn from them. Is.
“I was absolutely stunned to receive a telephone call, then I was absolutely thrilled to hear the news,” Imbens said on a call with reporters in Stockholm, adding that he was thrilled to share the award with two of his best friends. Were. Angrist was the best man at his marriage.
The prize, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is Nobel’s final harvest this year and shares the amount of 10 million Swedish crowns ($1.14 million) to the winners.
The prestigious awards for achievements in science, literature and peace were created and funded in the bequest of Swedish dynamite inventor and wealthy businessman Alfred Nobel.
They have been awarded since 1901, although the Economics Prize – created through a donation from Sweden’s central bank on its 300th anniversary – has been added later which was first given in 1969.
While economics prizes often tend to remain in the shadow of already well-known winners of the prizes of peace and literature, over the years prize winners have included many influential economists such as the Austrian-British Friedrich August von Hayek and the American Milton. Friedman.
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