ECONOMISTS David Card, Joshua Angrist and Guido Imbens won the 2021 Nobel economics prize yesterday for pioneering the use of “natural experiments” to understand the causal effects of economic policy and other events.

Natural experiments use real-life situations to work out impacts on the world, an approach that has spread to other fields and revolutionized empirical research.

One such experiment by Canada-born economist Card on a minimum wage increase in the U.S. state of New Jersey in the early 1990s prompted researchers to review their view that such increases should always lead to falls in employment.

“Natural experiments are everywhere,” Eva Mork, a member of the Prize Committee for the Alfred Nobel Memorial Prize in Economic sciences, told a news conference of the impact the method has had across all the social sciences.

Past Nobel Economics prizes have been dominated by U.S. institutes and this was no exception. Card currently works at the University of California, Berkeley; Angrist at Massachusetts Institute of Technology, Cambridge and Dutch-born Imbens at Stanford University.

“I was just absolutely stunned to get a telephone call, then I was just absolutely thrilled to hear the news,” Imbens said on a call with reporters in Stockholm, adding he was thrilled to share the prize with two of his good friends. Angrist was best man at his wedding.

The prize, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the last of this year’s crop of Nobels and sees the winners share a sum of 10 million Swedish crowns (US$1.14 million).

Card took half the prize “for his empirical contributions to labor economics,” the academy said. Angrist and Imbens shared the other half “for their methodological contributions to the analysis of causal relationships.”

On Thursday, Abdulrazak Gurnah won the 2021 Nobel Prize in Literature.

The prize has been awarded to novelist Gurnah “for his uncompromising and compassionate penetration of the effects of colonialism and the fate of the refugee in the gulf between cultures and continents,” the Swedish Academy said.(SD-Agencies)