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Newest Nobel Economics Laureates Praised for Experimental Research Into Poverty—and Their Work's Real-World Impact

The work of Abhijit Banerjee, Esther Duflo, and Michael Kremer "has great potential to further improve the lives of the worst-off people around the world," the Royal Swedish Academy of Sciences said.

Abhijit Banerjee, Esther Duflo, and Michael Kremer won the Nobel Economics Prize for their "experimental approach to alleviating global poverty," the Royal Swedish Academy of Sciences said Monday. (Photo: Jonathan Nackstrand/AFP via Getty Images)

Three researchers on Monday were awarded the Nobel Memorial Prize in Economic Sciences for their groundbreaking work in studying poverty-stricken communities around the world and developing ways to make a difference in poor people's lives through education and healthcare.

Abhijit Banerjee and Esther Duflo of M.I.T. and Michael Kremer of Harvard were named the winners of this year's award, receiving recognition for their two decades of experiment-based research and the concrete impact they've had on the communities they study—a departure for a prize which has often been given to economists whose work is grounded in theory.

"The research conducted by this year's Laureates has considerably improved our ability to fight global poverty," the Royal Swedish Academy of Sciences said (pdf). "In just two decades, their new experiment-based approach has transformed development economics, which is now a flourishing field of research."

Banerjee, Duflo, and Kremer examine ways to alleviate poverty through interventions in some of the systems that leave the poorest people behind, including schools and healthcare.

In one experiment, the researchers found that access to extra textbooks did not have a meaningful impact on improving students' outcomes in Kenya—but that tutors for low-performing students in India did help them to learn more effectively in school.

"As a direct result of one of their studies, more than five million Indian children have benefited from effective programs of remedial tutoring in schools," the Academy of Sciences wrote.

The international charity Save the Children, which counts Banerjee among its trustees, praised the Academy of Sciences for recognizing the researchers' work.

The researchers also conducted an experiment in which residents in more than 200 villages in India spread information about vaccinations, finding that families were more likely to receive immunizations when the information was shared in the community.

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"This is probably the first 21st-century prize in economics," Lawrence Katz, a Harvard economist, told the New York Times. "We've given lots of prizes for the advances of the 20th century."

"Their methods, and this is not stuff worked on 20, 30 years ago—this is stuff that, none of it started until the 2000s," he added. "This really is 21st-century economics, and it's wonderful that we're moving into the 21st century with the Nobel prize, in my view."

In a profile published by the New Yorker in 2010, Duflo said that as a graduate student, "I wrote in all the introductions of my papers, 'The ideal experiment to measure the effect of this would be...'"

"I just got fed up of writing about what the ideal experiment would be," she said. "Why don't we just do it?"

Duflo is only the second woman to be awarded the novel prize in economics. The late Elinor Ostrom won the prize in 2009 for her research into how people in small communities share natural resources with one another.

Economist Paul Krugman called the Academy's recognition of Dufko, Banerjee, and Kremer "heartening."

The economists' work "has great potential to further improve the lives of the worst-off people around the world," wrote the Academy.

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