Recipients of major economics prizes come from just 8 universities: Study

Even as economists prefer competition in the real world, a study has found that there is little competition among their own ranks.

In a new research paper, the scholars have noted that the recipients of major awards in economics, including the Nobel Prize, come from just eight US universities: Harvard, Yale, Princeton, Stanford, MIT, the University of Chicago, Columbia, and Berkeley.

This is in sharp contrast to other fields where a much more diverse range of scholars have won awards and where the range of recipients has only expanded over the years.

In the paper titled ‘High and Rising Institutional Concentration of Award-Winning Economists’, Richard B Freeman, Danxia Xie, Hanzhe Zhang, and Hanzhang Zhou note that all fields have witnessed a steady decentralisation of knowledge and prestige over the years with the exception of economics.

“All fields, except for economics, exhibit a low and decreasing concentration,
which suggests a trend toward decentralised knowledge production. Conversely, economics shows a high and rising concentration,” say the authors.

As for the reasons, the author say the reliance on physical capital, maturity of the
discipline, role of prestige, and other disciplinary norms may have contributed to such a reality.

‘Economics has become insular and status-obsessed’

In a commentary on the paper, Harvard economist David Deming said that such a concentration of awardees reflects the evolution of economics.

Deming said that economics has now become obsessed with status and does not focus on making a positive impact on the world.

“Our profession has become insular and status-obsessed, and not focused enough on making a positive impact on the world. Regular people think we economists are out of touch. Unfortunately, they have a point,” said Deming in an article in The Atlantic.

Deming further said that the concentration of economic prize-winners among certain elite American universities is also driven by the fact that humanities and sciences are fundamentally different in the way they are evaluated. He noted that while sciences are much more data-driven and objective, humanities disciplines like economics have become subjective over the years and therefore harder to objectively judge.

Deming notes that other humanities prizes, such as the Kluge Prize, the Holberg Prize, and the Rolf Schock Prize, also have a disproportionate concentration among the eight universities mentioned above.

“Unlike the sciences, the humanities are primarily interpretive, meaning they seek to understand and explain aspects of the human experience. This work is valuable, but it is much harder to judge objectively. Its subjective nature creates a halo effect whereby work written by a well-regarded scholar is widely assumed to be brilliant by default,” said Deming.

But there is still hope

Even as the economics awards have become an elite club, there is hope in the sense that empirical and data-driven approaches to economics have started taking centre-stage in recent years. As this is more likely to be objectively assessed on the back of data and numbers, the increased prevalence of such work may make the playing field more even.

In his article, Deming noted the works of development economists like Abhijit Banerjee, Esther Duflo, and Michael Kremer, who shared the 2019 Nobel Prize in economics “for their experimental approach to alleviating global poverty”. He noted that their work focussed on randomised controlled trials which provide data-based answers about improving people’s lives.

Their work led to the realisation that treating intestinal worms in schoolchildren in Kenya led to more adult incomes and the return on investment was pegged at 37 per cent. It also found that a $400 million popular United Nations (UN) programme to reduce indoor air pollution by providing poor people with efficient cooking stoves was a flop.

The promotion of such data-driven work that addresses real-world issues and offers either practical insights or solutions —instead of sophisticated theoretical papers that have little real-world value— may be the way forward.