The Nobel Prize in Economic Sciences 2021 primarily concerns the labor market, and how different variables affect it. The winners – David Card, Joshua Angrist, and Guido Imbens – have demonstrated how natural experiments might be utilized in empirical research (“The prize in economic sciences”, 2021). The authors have acknowledged the efficiency of natural experiments and have developed a framework to differentiate cause and effect in similar studies. This contribution might significantly change the scientific approach to phenomena in various spheres, including economics, psychology, sociology, and many others.
The two things in the research that impressed me the most is the complexity of the natural experiments and the methods to simplify the research. For instance, a natural experiment is significantly complicated by the fact that the researcher only knows the numerical data but is not aware of subjects’ motives. However, Angrist and Guido have proposed to use the “instrumental variables” method, which allows to roughly estimate the impact of the motives and, thus, simplify the research.
Concerning the natural experiments in the Kingdom, I believe that the estimated findings would be different due to the economic, cultural, and regional differences. Namely, the results might be less illustrative because of the territorial integrity of the country, compared to the United States; thus, there are fewer variables that allow determining the control and treatment groups on the national scale. Nevertheless, it does not imply the flaws of the framework or natural experiments. In other words, I believe that the findings would be different; however, they would still be highly useful to the national economy in case it is possible to find a suitable natural experiment.
Lastly, I believe that some ongoing projects within 2030 could be considered as a natural experiment in case of abrupt changes. The article transparently indicates that natural experiments are not rare; in contrast, they occur frequently due to various policies and systems, which clearly define the control and treatment groups (“The prize in economic sciences”, 2021). From these considerations, a 10-year period of the 2020s is a sufficient period of time to conduct natural experiments at least to some extent.
Reference
The prize in economic sciences 2021.(2021). The Royal Swedish Academy of Sciences.