Two Americans won this year’s Nobel prize in economics for developing ways to analyze how people make basic lifestyle decisions – such as where to live, when to get married and how much to work.
James Heckman, 56, of the University of Chicago, and Daniel McFadden, 63, of the University of California at Berkeley, will share the prize, worth more than $900,000.
They are specialists in microeconometrics, which combines economics and statistics.
McFadden developed ways to calculate how a person chooses between traveling by bus, subway or car – based on age, income, education, travel costs and journey time.
“What I did, beginning in the 1960s, was to take the economic theory of self-interest, which governs economic behavior, and apply it to life’s big decisions: when to get married, how many children to have, what occupation to choose,” he said.
Heckman has worked on ways to determine how various groups, such as married women, decide when and how much to work.