3 Economists Who Study Poverty Win Nobel Prize

October 14, 2019 Updated: October 15, 2019

Two researchers from the Massachusetts Institute of Technology and a third from Harvard University won the 2019 Nobel Prize in economics on Monday, Oct. 14. The award was for their groundbreaking research into what works, and what does not, in the fight to reduce global poverty.

The award went to MIT’s Abhijit Banerjee and Esther Duflo, and Harvard’s Michael Kremer. The 46-year-old Duflo is the youngest person ever to win the prize and only the second woman, after Elinor Ostrom in 2009.

The three winners, who have worked together, revolutionized developmental economics by pioneering field experiments that generate practical insights into how poor people respond to education, health care, and other programs meant to lift them out of poverty.

“Without spending some time understanding the intricacies of the lives of the poor and why they make the choices they make … it is impossible to design the right approach,” Duflo told a news conference held by the Royal Swedish Academy of Sciences, which awarded the prize.

Banerjee and Duflo, who are married, also found that microcredit programs, which provide small loans to encourage poor people to start businesses, did little to help the poor in the Indian city of Hyderabad; studies in Bosnia-Herzegovina, Ethiopia, Morocco, Mexico, and Mongolia produced similar results.

Duflo and Banerjee told a news conference at MIT they were not sure how to react when the Nobel committee woke them with the news of their win.

Duflo said that when the phone rang, she answered and was told it was an important call from Sweden.

She said her response was: “Well, since you’ve now woken me up, go ahead.”

Banerjee said the Nobel committee asked about getting one of them on a conference call, but “they said they wanted a woman, and I didn’t qualify,”—so he went back to bed.

Duflo said receiving the Nobel was “incredibly humbling.”

Officially known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, the award wasn’t created by the prize founder but by the Swedish central bank in 1968, with the first winner selected a year later.

With the glory comes a $918,000 cash award, a gold medal, and a diploma.

Last week, six Nobel prizes were given in medicine, physics, and chemistry plus two literary awards and the Peace Prize.

All but the winner of the Peace Prize receive their awards on Dec. 10—the anniversary of Nobel’s 1896 death—in Stockholm. The winner of the Peace Prize gets the award in Oslo, Norway.