With the Econ Nobel (or for those who feel better using the official label, the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” … ) to be announced on Monday, the time is ripe for speculation. Greg Mankiw, Don Boudreaux, the WSJ, and Tyler Cowen have chimed in on the frontrunners. Cowen predicts Eugene Fama and Richard Thaler for empirical finance while registering his own vote in favor of GMU’s Gordon Tullock (seconded by Boudreaux). The Thomson Scientific poll lists a few possible combinations: (1) Bhagwati, Dixit & Krugman (trade), (2) Jorgensen (investment and growth), or (3) Hart, Holmstrom, and Williamson (transactions cost economics and contract theory). The current leaders in the Thomson poll are Hart, Holmstrom and Williamson, though the WSJ article notes that the Thomson poll does not have a fantastic track record (nor do the betting pools at Harvard and MIT, which have Hart, Holmstrom and Barro as front runners). Boudreaux goes in a different direction, looking backward rather than forward, and reposting a list of dead economists who did not, but perhaps should have, received the prize: Bauer, Knight, Machlup, von Mises, Morgenstern, Robinson, and Julian Simon.
I join my Mason colleagues Cowen and Boudreaux (and plenty of others, I’m sure) in rooting for Tullock (what, you thought we were just a basketball powerhouse?). But I would be remiss in posting on this subject without noting that an Armen Alchian & Harold Demsetz prize is a mighty fine alternative to the excellent Hart, Holmstrom & Williamson trio in transactions cost/ theory of the firm/ contract theory. These two are mentioned as possibilities nearly every year, and clearly are a self-interested pick for me as I was privileged to have both serve on my dissertation committee. As Bill has mentioned here before, and as announced in our “policies,” TOTM is a believer in self-promotion.
I suppose I could just stop there given our promotion policy and a presumed general understanding of loyalty to one’s alma mater and scholarly mentors, but just for kicks I looked at the citation counts for those articles receiving at least 500 cites in 41 selected refereed economics journals between 1970-2005 in this article by Kim, Morse, and Zingales. Now, I’m making no claims that such citations are or should be the criteria for a Nobel, but I did find the numbers interesting and thought I’d post them. The results? You’ll have to read below the fold.
The Hart, Holmstrom & Williamson trio outpoints the Alchian & Demsetz duo 3731 to 3040 (cites to co-authored work are 1 point only), though the latter obviously receive more cites per author. In addition, Alchian appears twice (#12 and #30) on the list before any of the HHW trio (Holmstrom at #39).
What about going three on three with my dissertation chair and sometimes co-author Benjamin Klein joining Alchian and Demsetz? He is a natural fit, as Alchian’s co-author of the classic 1978 piece “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process.” Results: 3864 to 3731 in favor of the UCLA group. This analysis is basically limited to the 7 articles (4 to 3 in favor of the HHW trio) receiving more than 500 citations in these journals, though both groups obviously have made other important contributions that do not (yet) meet this criteria. In any event, I thought the figures were interesting.
Of course, if these citation figures do matter or are a good proxy for something that does, it is worth checking out the list to see who might come out ahead of Alchian & Demsetz. Alchian & Demsetz (1972, AER) come in at the #12 spot. Let’s check out the top 18 for good measure.
1. White, H. (1980), “A Heteroskedasticity-Consistent Covariance-Matrix Estimator and a Direct Test for Heteroskedasticity.” Econometrica 48 (4), 817-838.
2. Kahneman, D., Tversky, A. (1979). “Prospect Theory – Analysis of Decision under Risk
Econometrica 47 (2), 263-291.
3. Jensen, M. C., Meckling, W. H. (1976). “Theory of Firm – Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3 (4), 305-360.
4. Engle, R. F., Granger, C. W. J. (1987). “Cointegration and Error Correction – Representation, Estimation, and Testing.” Econometrica 55 (2), 251-276.
5. Heckman, J. J. (1979). “Sample Selection Bias as a Specification Error.” Econometrica 47 (1), 153-161.
6. Black, F., Scholes, M. (1973). “Pricing of Options and Corporate Liabilities.” Journal of Political Economy 81 (3), 637-654.
7. Dickey, D. A., Fuller, W. A. (1979). “Distribution of the Estimators for Autoregressive Time-Series with a Unit Root.” Journal of the American Statistical Association 74 (366), 427-431.
8. Johansen, S. (1988). “Statistical-Analysis of Cointegration Vectors.” Journal of Economic Dynamics & Control 12 (2-3), 231-254.
9. Cleveland, W. S. (1979). “Robust Locally Weighted Regression and Smoothing Scatterplots.” Journal of the American Statistical Association 74 (368), 829-836.
10. Engle, R. F. (1982). “Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United-Kingdom Inflation.” Econometrica 50 (4), 987-1007.
11. Hausman, J. A. (1978). “Specification Tests in Econometrics.” Econometrica 46 (6),
12. Alchian, A. A., Demsetz, H. (1972). “Production, Information Costs, and
Economic Organization.” American Economic Review 62 (5), 777-795.
13. Akerlof, G. A. (1970). “Market for Lemons – Quality Uncertainty and Market Mechanism
Quarterly Journal of Economics 84 (3), 488-500.
14. Stigler, G. J. (1971). “Theory of Economic Regulation Bell Journal of Economics and Management Science 2 (1), 3-21.
15. Lucas, R. E. (1988). “On the Mechanics of Economic-Development.” Journal of Monetary Economics 22 (1), 3-42.
16. Romer, P. M. (1986). “Increasing Returns and Long-Run Growth.” Journal of Political
Economy 94 (5), 1002-1037.
17. Hansen, L. P. (1982). “Large Sample Properties of Generalized-Method of Moments Estimators.” Econometrica 50 (4), 1029-1054.
18. Dickey, D. A. & Fuller, W.A, “Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root.” Econometrica 49 (4), 1057-72.
A number of these contributions fall into two categories: (1) methodological; or (2) the author already won the prize. For example, UCSD’s Hal White has the most cited contribution, which is clearly methodological — as are Dickey & Fuller (#7, #18), Johansen (#8), Cleveland (#9), Hausman (#11), and Hansen (#17). Methodological contributions tend to have very high citation counts for obvious reasons. Of course, this does not mean they are not worthy of Nobel recognition! Indeed, a quick glance at the list reveals that a number of methodological contributions have indeed earned the prize in recent years (see, e.g., Heckman, McFadden, Engle, and Granger). But if we remove methodological contributions, Nobel winners, and those who passed on without being awarded the Nobel, we are left with: Jensen & Meckling (#3), Alchian & Demsetz (#12), Romer (#16) (the ranking does not change if we use all citations for papers with > 500 cites). And of course, there are a number below the top 18 on this list that have already won as well, which may suggest that there is not much to this methodology (as does the fact that Tullock is not on the list at all).
If pressed for an answer (read: if this thing was on Tradesports), I would
put my dollar on say Fama (along with some combination of Thaler and French) by a nose over Bhagwati/Dixit (possibly with Krugman). But I’ll be crossing my fingers for any Patriots or Bruins to get a piece of the Prize. Anyway, get your guesses on the record in the comments section before Monday morning!
You’re on. I can taste my hard-won 5 Guys burger already . . . .
Thanks for the comments.
Keith: If there is ever a Nobel in Legal Science (a la Tom Ulen), Posner surely will be a frontrunner. Within economics itself, I agree with you that the lack of PhD should not be a dealbreaker. And to be sure, Posner’s contributions within economics itself are worthy of consideration. But I’m sticking to my guns here and casting my hypothetical non-Phd vote for Tullock.
Geoff: Ok. I’ll give you even hypothetical blog money (you know, like the kind I earn blogging here … ) on the “field” versus a group including Hart, Williamson, and Bhagwati? Loser buys hypothetical dinner …
How about a Nobel for Richard Posner for his foundational work in law and economics? Sure, he doesn’t have a PhD in economics, but neither did last year’s winner, my cousin Bob Aumann, whose PhD is in mathematics. (Daniel Kahneman’s PhD isn’t in economics either.)
Sure, Coase has already been recognized for his invaluable contributions to law and economics. But Posner’s enormous impact deserves to be recognized too, either on its own or together with the work of other major figures in the field such as Calabresi, Manne, and Shavell.
Certainly, if the Nobel committee is going to use citation analysis as a way to measure impact, Posner would have to be very high on the committee’s list. If it doesn’t happen for Posner this year, it ought to happen eventually.
I predict it will be a European I’ve never heard of and who doesn’t in a million years deserve it over Alchian and Demsetz, Tullock, or even Hart/Holmstrom/Williamson. In other words, someone who’s never been in my kitchen.