Natural Experiment pioneers research causal effects of economic policy and other events

The Nobel Prize in economics has been awarded to three U.S. based academics for their natural experiments on how economic theory is supported by real-life situations.

Chair of the Economic Sciences Prize Committee says “their research has substantially improved our ability to answer key causal questions, which has been of great benefit to society”.

The previous research of one of the winners, David Card, contributed to the introduction of the UK’s minimum wage, finding that it increased employment in New Jersey restaurants.

The two other winners, Joshua Angrist and Guido Imbens, won based on their work on the relationship between education and income and how an extra year in school impacts earnings.

The three have been said to have revolutionised empirical research.