Economists will disapprove of yesterday's decision to award the Nobel Economics Prize to Elinor Ostrom because it signals a shift toward rewarding social scientists, said Steven Levitt, a University of Chicago professor and co-author of the bestseller "Freakonomics."
Ostrom, a University of Indiana professor who calls herself a political economist, became the first woman to win the prize when she received it with Oliver Williamson for research on the limits of markets and how organizations work. The announcement came three days after President Barack Obama unexpectedly won the Nobel Peace Prize.
"The economics profession is going to hate the prize going to Ostrom even more than Republicans hated the peace prize going to Obama," Levitt wrote on the Economist's View blog. "This award demonstrates, in a way that no previous prize has, that the prize is moving toward a Nobel in social science, not a Nobel in economics."
While Williamson and Ostrom featured on lists of potential candidates before the decision, Ladbrokes Plc spokesman Joakim Roenngren yesterday called them "long-shot winners" with the betting firm paying 51 times the money wagered on Ostrom, who had attracted "almost no bets."
"I don't have very much familiarity with the work of Elinor Ostrom," Edmund Phelps, who won the Nobel Economics Prize in 2006, said in an interview today with Bloomberg Television.
Levitt said a poll of economists before yesterday's decision would probably have left just one in five able to identify Ostrom or her research and that he was unable to do so.
"She is a political scientist both by training and her career -- one of the most decorated political scientists around," he said. "So the fact that I have never heard of her reflects badly on me, and it also highlights just how substantial the boundaries between social science disciplines remain."
Levitt, whose 2005 book used economics to explain why baby names fluctuate in fashion and why drug dealers still live with their mothers, said his noting of a shift toward social sciences wasn't meant "to imply this is necessarily a bad thing -- economists certainly do not have a monopoly on talent within the social sciences -- just that it will be unpopular among my peers."
Levitt is a winner of the John Bates Clark award, presented every two years for the best economist under the age of 40.
The Royal Swedish Academy of Sciences said yesterday in Stockholm that Ostrom had won "for her analysis of economic governance." Her work has shown that informal groups can sometimes manage natural resources such as forests and lakes better than private companies or the government. Her doctorate is in political science rather than economics.
Alfred Nobel, the Swede who invented dynamite, in his will in 1896 established awards for achievements in physics, chemistry, medicine, peace and literature. The economics prize was set up by Sweden's central bank in 1968. Former winners include Milton Friedman, Amartya Sen and Paul Krugman.