For most people the second week in October probably doesn’t hold much promise.
Longer days for some, perhaps. But for those is us in the economics profession, come the second week of October we’re furiously compiling lists and discussing odds - about who is likely to win the coveted Nobel prize in Economics.
More formally known as the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”, the prize has been awarded since 1969 for outstanding contributions to the field of economics.
The puzzle of who receives the novel prize is in itself a bit like an equation.
It often depends on who else is in the running and the chosen field is cyclical. It’s highly unusual for the prize to be awarded to theorists from the same field several times in a row.
Age plays a factor too, both because the prize cannot be awarded posthumously and because the younger you are, the less likely you are to be in contention because you’ve got years more in which to make a contribution.
Which makes this years’ winners remarkable.
At 46 (ten days shy of 47) Esther Duflo is the youngest recipient of the award in its 51 year history and only the second female.
This year’s trio of winners – Abhijit Banerjee, Esther Duflo and Michael Kremer received the Nobel for “their experimental approach to alleviating global poverty”.
By designing experiments at a small level, they were able to provide real world answers about what works in alleviating poverty.
What works matters
In doing it they sought to actually understand the lives of the people they were trying to help.
Notably, Kremer’s first experiment – providing textbooks at schools – failed.
He found that the impact on test scores from the textbooks (and the induced enrolment of students) was zero.
Duflo and Banerjee spell out what works and explain how small interventions can create lasting change in their important book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty.
Authors: Gabriela D'Souza, Affiliate, Monash department of business statistics and econometrics, Monash University