Stanford economics professor and senior fellow at the Stanford Institute for Economic Policy Research Guido Imbens was awarded the Nobel Prize in Economic Sciences on Monday morning for his contributions to the analysis of causal relationships.
Imbens is the University’s 35th Nobel Laureate, following the paths of Stanford economists Robert Wilson and Paul Milgrom, who were awarded the prize last year. Imbens joined the Stanford faculty in 2012 and is now an applied econometrics professor and professor of economics at the Graduate School of Business.
“We congratulate Guido Imbens on his remarkable achievement in economics,” Stanford President Marc Tessier-Lavigne said during the University’s Nobel Prize press conference on Monday. “All of us at Stanford are incredibly proud of Professor Imbens, and we’re delighted that his accomplishments have been recognized by the Nobel Committee.”
The committee specifically recognized Imbens for his work with Massachusetts Institute of Technology economist Joshua Angrist on inferring real-world outcomes of possible economic policies. The team worked with policymakers to examine the impact economic policies have on the education and labor sectors.
Economic policies cannot be tested like a chemistry lab experiment — their implementations have real-life repercussions, which make them difficult to study, according to Debra Satz, the dean of the School of Humanities and Sciences.
“Social scientists can’t do the kinds of controlled experiments that you can do in medicine,” Satz said during the press conference. “We can’t do that in the real world in the sense that we don’t want to create a famine, and then test it against a non-famine. So we have to look for other methods.”
Imbens’s methods analyze observational data to infer impacts of economic policy by drawing correlations between existing realities and eliminating the financial and ethical implications of real experiments.
For instance, policymakers would benefit from knowing the extent to which guaranteed income would impact the labor force. But implementing an actual guaranteed income as part of an experiment in the real world would be expensive, Imbens explained. So he and Angrist applied their observation-based method to an existing situation in Massachusetts.
The team examined a Massachusetts lottery, in which winners were paid their winnings in a series of disbursements over a number of years — resembling a guaranteed income. When they compared lottery winners with those who did not win, they found that while there were some impacts on labor supply, it didn’t significantly change how much people worked.
The work that Imbens and his colleagues have done “has helped to ignite nothing short of an empirical revolution in the social sciences,” Dean Jonathan Levin said during the press conference.
Though Imbens is distinguished in his field, he said that the Nobel news still shocked him and that he “simply did not expect this to come anytime soon.” A call from Sweden woke him up at 2:10 a.m. Monday, and “it turned out to be a very nice surprise,” he said. By 3 a.m., a number of Stanford community members poured into Imbens’s home, where they helped field media inquiries, and were welcomed with a pancake breakfast prepared by his children.
While Imbens and Angrist jointly received one half of the Nobel Prize, the other went to David Card, a professor of economics at the University of California, Berkeley, for his scholarship on labor economics. Imbens said he was “thrilled to be sharing the prize with them,” referring to them as “old friends.” Many years ago, the three economists discussed the concepts for which they received their Nobel Prize.
“We worked together and talked about these things at a time when they weren’t quite as well received and fashionable as they are now,” Imbens said. “We were very convinced that those were good ideas and interesting ways to do research. We had long conversations about it then, and to see that come through in this way — it’s really stunning.”
In addition to acknowledging Imbens’s role as a knowledgeable economist, his students praised him for being a mentor.
“He is always very generous with his time, advice and comedic stories — he has a fantastic sense of humor,” graduate student Lea Bottmer wrote. “He deeply cares about every single one of his students, always checking in on our lives outside of work and encouraging us to keep a healthy balance between work and life.”
And Imbens is just as much a mentor to his students as he is to his colleagues.
“He is an incredible teacher, a generous mentor, and a wise and incisive thinker committed to using science to make the world a better place,” wrote Matthew Gentzkow, one of Imbens’s fellow professors. “I couldn’t ask for a better colleague, and I’m honored to get to call him a friend.”
In addition to discussing economics with his peers, Imbens said that he and his wife, also an economist, frequently explore economic questions with their children. After winning the Nobel Prize, Imbens quipped, “I’m hoping they’ll get the message that they need to listen to me a bit more.”