MIT economists win Nobel Memorial Prize in Economic Sciences
Professors Abhijit Banerjee and Esther Duflo recognized for their work in development economics
MIT economics professors Abhijit Banerjee and Esther Duflo PhD ’99 were awarded the 2019 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel on Monday for their work on anti-poverty research. Harvard economist Michael Kremer is a co-winner of the prize.
Duflo, at 46, is the youngest person and the second woman to have ever won the Nobel Memorial Prize in Economic Sciences.
According to a press release from the Royal Swedish Academy of Sciences, “the research conducted by this year’s Laureates has considerably improved our ability to fight global poverty. In just two decades, their new experiment-based approach has transformed development economics.”
The work done by Banerjee, Duflo, and Kremer involves using randomized controlled trials to examine the effects of small interventions in improving global issues, such as child healthcare and education, in developing countries. Their research uses empirical data to discover causal relationships that can be applied to alleviate global poverty.
Duflo is the Abdul Latif Jameel professor of poverty alleviation and development economics and Banerjee is the Ford Foundation International professor of economics. They are co-founders of the Abdul Latif Jameel Poverty Action Lab (J-PAL), a global research center with the goal of reducing poverty via scientific evidence.
At a press conference held at MIT Monday, President L. Rafael Reif said, “By providing an experimental basis for developmental economics, Professors Banerjee and Duflo have reimagined their field and profoundly changed how governments and agencies around the world intervene to help people in poverty.”
“MIT economics is known for its combination of superb economic talent in a commitment to making a better world, and Abhijit and Esther stand as a wonderful example of both,” Reif continued.
Duflo said at the press conference that being given the prize “is going to make it a little easier to penetrate the many doors that are half open to us or not quite open to us, and hopefully bring the message of ‘policy based on evidence and hard thinking’ to many other places as well.”
“One could be a little bit more rigorous about what policies and what type of things can really help the poor,” Duflo said. “It goes in designing policies … based on a better understanding of how the poor live, why they make the choices they make, what are specific traps that hold them back, and what lever to push that could unlock these traps.”
“But one grows also by accepting the possibility that maybe you didn’t get it right exactly the first time, and that innovating, experimenting is useful,” Duflo continued.
Duflo also thanked the faculty and students of the economics department, specifically Bengt Holmström, who won the Nobel Memorial Prize in Economic Sciences in 2016, for seeing the potential of their research. She also thanked former MIT President Susan Hockfield for connecting them with donors, and Mohammed Jameel, who contributed several endowments to J-PAL.
Addressing the low proportion of women who have been Nobel Laureates and who pursue academic professions, Duflo said, “There are not enough women in the economic profession, at all levels. There are not enough undergraduates who choose to take economics. There are not enough graduate students who continue. There are not enough assistant professors. There are not enough tenured faculty.”
“The reasons why there are so few women who get the Nobel Prize or other prizes is not because the people who give prizes are discriminating against women. It’s because the entire funnel is just not big enough,” Duflo continued. “And that’s not true just for women, I should say. It’s true also for minorities. There are not enough African-Americans in the economics profession, by any stretch of the imagination. In fact, it makes women look positively numerous, and that has to change.”
Banerjee added that he takes pride “that our specific, little corner of economics, the field of development economics, has many more women than almost any other part of economics.”
When asked where they were planning to take their work, Banerjee responded, “I think we hope that we’ll get to do more of the same.”
“This was not work that we did a long time ago. We’re excited about what we’re doing now,” Banerjee explained. “We are learning new things. I’m really excited to look at the results from our latest intervention, so I think what I hope this will do is just open more opportunities to do more inventive things.”
“I think maybe one thing that we have started to do,” Duflo added, “is working with governments and working at scale with governments to help them evaluate both new approaches and also better ways to do things that they want to do anyways.”
Two other MIT affiliates were awarded the Nobel Prize this year. John Goodenough, former researcher at the MIT Lincoln Lab, shared the prize in chemistry for developing the lithium-ion battery. Visiting scientist at the MIT Kavli Institute Didier Queloz shared the prize in physics for his discovery of the first known exoplanet orbiting a solar-like star.