- Every year, economic researchers receive the Nobel Prize along with a considerable amount of prize money.
- Some saved their multi-million winnings, others donated them.
- And for at least one economist, the prize meant a chance to improve his sailboat.
It turns out that it is profitable to revolutionize the field of economics. All you need to do is win the Nobel Prize.
In 2023, the winners Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel they received 11 million Swedish krona – which translates to just over $1 million. This million-dollar prize was recently awarded to a Harvard professor Claudia Goldinwhose work on women’s rights, equal pay and the motherhood penalty helped spawn an entire field of economics focused on how pay gaps arise and persist.
“A lot of people are doing research like this right now, and I think that means they’re going to see that it’s important and appreciated,” Goldin told Insider after her win.
Goldin joins an esteemed group of 93 laureates and now faces one of the questions that Nobel Prize-winning economists may be able to answer: how to spend the money.
This is an age-old question that some winners in various categories have answered when discussing such things motorcycles Or houses. Others donated it to further research or charity. According to Guardianwinners usually receive their prize money after the award ceremony in Stockholm; many receive their prizes by bank transfer, Lars Heikenstein, executive director of the Nobel Foundation, told the Guardian, and some want the prizes to be distributed in installments over two separate fiscal years.
Goldin did not immediately respond to Insider’s request for comment on how she plans to spend her winnings, but anecdotally, previous economics winners seemed to be guided by their own research when thinking about their winnings.
Franco Modigliani, the MIT professor who discovered it Nobel Prize in Economics in 1985and won approximately $225,000. According to MIT obituaryhe spent part of this sum on modernizing his Laser class sailboat. Ultimately, however, he wanted to spend his winnings, according to his own research into people’s saving and spending habits.
“I will use the prize money according to my own theory of human behavior, which is to distribute it over the rest of my life,” Modigliani said after receiving the prize, according to Washington Post Office. “I’m not going to drink. I will use it gradually. My theory is that people do that.”
Modigliani is not alone in putting his (research) winnings to the test. Elinor Ostromthe first woman to win the award for her research on common resources, she donated her portion of her $1.4 million winnings – she won the award with Oliver E. Williamson in 2009 – to the University’s Political Theory and Policy Analysis Workshop Indiana, which she co-created with her husband – according to an posthumous in Proceedings of the National Academy of Sciences of the United States of America.
Esther Duflo, second woman win the award for their work to fight poverty, along with fellow 2019 winners Abhijit Banerjee (who is also her husband) and Michael Kremer also donated their winnings. Harvard University’s Weiss Fund for Research in Development Economics has contributed about $916,000, according to the foundation, which helps fund students and research in development economics. Boston Globe.
Meanwhile, Sir Angus Deaton, who won award in 2015 for his work in the fight against poverty and inequality, told the Guardian that he “worked on understanding how to spend money and save my entire professional life” and learned that “there’s no point in spending a one-off windfall.” After paying a “large” tax on his winnings, he put the rest into a retirement fund.
Richard Thaler, a behavioral economist and professor at the University of Chicago, won the award for his work on how humans are partially irrational. So when he was asked how he would spend his roughly $1.1 million winnings in 2017, Thaler he told reporters: “I will try to spend it as irrationally as possible.”
In another official interview for the Nobel Prize, Thaler explained that he made that comment at 4:45 a.m
“I don’t have the money yet, so I didn’t keep my word,” Thaler said. “I’m going to throw a good party on Saturday night and then try to spend it making as many people as happy as possible.”