Nobel economics prize awarded for real-life studies

David Card, Joshua Angrist and Guido Imbens have been awarded this year's Nobel prize for economics.

The trio shared the prize for their use of "natural experiments" to understand how economic policy and other events connect.

Natural experiments use real-life situations to work out the impact of government decisions.

Canadian-born Card, for example, looked at the impact of minimum wage increases on employment in US state New Jersey.

His findings prompted researchers to review their opinion that such increases should always lead to falls in employment.

"Natural experiments are everywhere," said Eva Mörk, a member of the prize committee for the Alfred Nobel Memorial Prize in Economic Sciences.

Card, from the University of California, won for his analysis of labour markets and economics.

American Joshua Angrist from MIT and Guido Imbens, a Dutch academic at Stanford University, share the award "for their methodological contributions to the analysis of causal relationships".

The winners share the sum of 10 million Swedish crowns (£839,000), with Card receiving half of the award.

Although not one of the original Nobel Prizes, the economics award is administered by the Nobel Foundation and is the last to be announced each year.

The other Nobel prizes were established by Alfred Nobel's will in 1895.

The economics prize, officially known as the Sveriges Riksbank (Sweden's central bank) Prize in Economic Sciences in Memory of Alfred Nobel, was created in 1968.

Last year, the prize was won by Paul Milgrom and Robert Wilson of Stanford University for their work on making auctions run more efficiently.

They used game theory, which uses mathematics to study decision-making conflict, and strategy in social situation, to explore the behaviour of bidders, which in turn helped in developing formats for the sale of aircraft landing slots, radio spectrums, and emissions trading.

In 2019, it was awarded to Abhijit Banerjee, Esther Duflo and Michael Kremer, for their work on the causes and remedies of poverty.