<p>yea, but he trained at Harvard...</p>
<p>So what? He's still bringing honor to Chicago, not Harvard.</p>
<p>yeah, and this proves that he prefers chicago's approach to economics over harvard's. </p>
<p>and in any case, he's teaching at u chicago isn't he?</p>
<p>He teaches game theory to UG's and also at the graduate level. I am somewhat suprised that he won this early since the consensus was a lot of other Chicago faculty would win first. Kevin Murphy and Eugene Fama standing out. Steven Levitt is still too young.</p>
<p>besides, if columbia is counting al gore as one of their wins, we can count an actual faculty member as one of ours :)</p>
<p>uchicagoalum,</p>
<p>Fama can't win yet. It is still too early to cede the ground to EMT. Also, Levitt may win for "bringing economics to the masses" but his methodology is suspect and not universally respected by economists.</p>
<p>Fama will win in due time. EMT forms the basis of literally all of modern finance as an ideal type. Even if markets are not always efficient as a practical matter (although they mostly are in the sense that Fama means it as opposed to the lay understanding), the very fact that we use the EMT framework to consider deviations on the margin and how to correct them speaks volumes to the models overall influence. In reality, I think his work is far more important than say Beckers or Fogels, since we can actually utilize its outcomes on a day-to-day basis. </p>
<p>As for Levitt, the critics have largely been repudiated on the abortion article (see below). The real battle over whether his work matters, that is, do we really care about cheating algorithms and the like, is one which I believe the profession is mostly on his side about as part of a larger strain of economic intellectual imperialism. </p>
<p>An unusually good summary from Wikipedia:</p>
<p>In November 2005, two Federal Reserve Bank of Boston economists published a working paper (Foote and Goetz 2005 [3]) which argued that the results in Donohue and Levitt's abortion and crime paper were due to statistical errors by the authors - in particular the omission of certain statistical controls that Donohue and Levitt had claimed to have used and using the total number of arrests and not the arrest rate in explaining changes in the crime rate. The Economist remarked on the news of the errors that "for someone of Mr Levitt's iconoclasm and ingenuity, technical ineptitude is a much graver charge than moral turpitude. To be politically incorrect is one thing; to be simply incorrect quite another."[4] However, subsequent correction for the errors pointed out by the critique turned out to not reverse or eliminate the link originally expounded by Levitt and Donahue, thus removing speculation that the original model was purposefully distortionary. Theodore Joyce had previously criticised the results in 2003 finding that no such link existed ("Did Legalized Abortion Lower Crime?" Journal of Human Resources, 2003, 38(1), pp. 1 -37.); however, Joyce's criticism has been refuted by the authors and others as profoundly flawed, a result of omitted variables bias. Responses to both criticisms can be found here (Foote/Goetz reply) and here (Joyce reply). See Legalized abortion and crime effect.</p>
<p>i love U of C</p>
<p>Levitt will get it eventually, even though it seems like there's been a whole lot of backlash against him recently. But you can't deny that this guy has made economics a whole lot more mainstream. When I tell people I want to major in econ they usually ask right away, "Have you read Freaknonomics?". And I truly feel his work is original and important (though not in the conventional ways). </p>
<p>I recently said that the reason I love Freakonomics and Levitt's work is that it really encourages you to think outside the box and question conventional wisdom.</p>
<p>"When I tell people I want to major in econ they usually ask right away, "Have you read Freaknonomics?"."</p>
<p>And you can probably just reply that "Freakonomics" is a catchy name for some extraordinarily basic economic axioms - pop science custom-engineered for the bestseller charts :) </p>
<p>Seriously, "Naked Economics" is much better and, you know, not ghost-written.</p>
<p>But an extremely entertaining read nonetheless.</p>
<p>EDIT: In my opinion, that is.</p>
<p>I loved Freakonomics, but it's not stuff that earns you a Nobel Prize. It had nowhere close to the originality or the academic rigor expected of a Noble Prize winning work. Of course, the studies that it was based on were well-researched, well-argued and based on sound economic principles, but they mostly used accepted economic principles to shed light on original situations, rather than using them developing new economic principles. The book is good for economics, no doubt - it helps dispel the notion that the field is strictly limited to fiscal issues and policy.</p>
<p>Agreed completely there. I feel Levitt will get the prize at some point but not due to Freakonomics. He's obviously talented and has a ton of years ahead of him to put out work that I guess we could call a bit more "relevant". So far I think the studies into the crack cocaine trade have been the most interesting and probably the most "important".</p>
<p>On a recent questionnaire for school I was asked what book I would require high schoolers to read. After thinking a bit I said Freakonomics, not because it's groundbreaking, but simply helps you to think in non-conventional ways. I also chose Freakonomics because I truly feel like most people would really enjoy it if they picked it up. I think it's ah influence in my questioning every single study I hear on TV or that a teacher cites.</p>
<p>leavitt held a showing in mandel hall the other day that was open for students at u of c.</p>
<p>RE Gene Fama: He is far more than EMT. He essentially brought economic theory to the analysis of financial markets. And anyone who really understood EMT would also understand that it is part of a larger body of work that describes an approach to the understanding of capital markets, where market imperfections CAN exist, and are there to be discovered, exploited and thereby driving the market back to equilibrium and "efficiency".</p>
<p>Frankly, it has puzzled me that he has not won already. I suspect it is because his work is too "practical" - people can make money (or avoid losing it!) through his work.</p>
<p>I agree about Fama. Certainly, he is the most influential economist in Chicago without a Nobel Prize. That ought to count for something! Re: commerciality. Didn't Bob Merton and Myron Scholes get a Nobel Prize? Did their work have any application other than making money?</p>
<p>For anyone arguing that commerciality doesn't count... Al Gore?</p>
<p>He won the Peace Prize, which is invariably awarded to highly public people. Few people would recognize the last 10 winners in economics, chemistry, physics, etc.</p>
<p>uchicagoalum,</p>
<p>Just because, "EMT forms the basis of literally all of modern finance as an ideal type," this tells us nothing about the validity of EMT as a theory, merely that it is the most convenient to apply. Also, Behavioral finance offers compelling evidence against EMT.</p>
<p>Also, when I said that, "[Levitt's] methodology is suspect," I didn't mean interpretation of data. His method of research is itself flawed. He violates the 1st rule of econometrics: Formulate hypotheses BEFORE running regressions. Levitt works the other way around, which makes his results much more dynamic and impressive, but ultimately less convincing. </p>
<p>newmassdad,</p>
<p>Fama was not the first (or most important) to bring "economic theory to the analysis of financial markets." Check out Bernstein's "Capital Ideas," a text used by the FinMath program at UChicago.</p>