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UC Berkeley economist Daniel McFadden receives this year's Nobel Prize in economics
11 Oct 2000

Berkeley - Daniel L. McFadden, a University of California, Berkeley, professor who is a winner of this year's Nobel Prize in economics, described himself this morning at a campus press conference as "a designer of the machinery that other economists can use."

McFadden, in the economics department of the College of Letters & Science, is "an economist's economist," said Maurice Obstfeld, department chair. "His scientific achievements have changed the way we approach economic theory as well as the econometrics of individual decision-making."

McFadden said that being honored with the 2000 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel "is more than I dreamed. I did not expect this."

"I was raised to be modest, so it's a bit shocking to be thrust into a position of prominence," he added. Already, McFadden has been invited to the White House and to dinner with the King of Sweden.

Chancellor Robert M. Berdahl reminded McFadden at the news conference that he also wins a lifetime reserved parking space on campus.

UC Berkeley's E. Morris Cox Professor of Economics, McFadden shares the prize with the University of Chicago's James Heckman, whom McFadden described as "an old friend with whom I have exchanged ideas over three decades."

McFadden's Nobel brings to 17 the number of UC Berkeley faculty members who have been awarded the prize. Prior to McFadden's win, two other UC Berkeley professors - John Harsanyi in 1994 and Gerard Debreu in 1983 - won the Nobel Prize in economics.

Microeconometrics, McFadden's field, is a methodology for studying economic information about large groups of individuals, households or firms. The statistical tools McFadden has developed are used not only by economists, but by social scientists and others as well.

"The methods he developed are now used routinely to study behavior as diverse as travel demand, migration, the demand for consumer durables, college-going behavior, occupational choice and housing location," said Charles Manski, professor of economics at Northwestern University.

McFadden's methods, for example, were applied in forecasting ridership on Bay Area Rapid Transit (BART) trains before they began operation.

The nature of McFadden's work, said UC Berkeley's chancellor, "is squarely in the service of society, helping us to understand many of its complex challenges."

"In my work, I've always been motivated to solve the problem of the day," said McFadden, who currently is investigating issues facing the elderly - housing, health and finances.

UC President Richard C. Atkinson congratulated the latest Nobel Laureate in the UC system by saying the award "is a great personal honor for Professor McFadden and a tribute to the world-class caliber of the University of California's faculty." Yesterday, two UC Santa Barbara professors also won Nobel prizes - one in physics, the other in chemistry.

McFadden also was praised today for his work with students.

"Dan's influence on the profession has been felt not only through his own research contributions but also through the enormous effort he has made to nurture young researchers," said Manski from Northwestern University. Despite a day of constant phone calls - from the Nobel committee, reporters and well wishers - that began at 2:30 a.m., McFadden still taught an advanced econometrics class late this afternoon.

McFadden, 63, grew up in rural North Carolina on a farm where there was no electricity until he was six years old. As a teenager, he thought he would become a psychologist. As an undergraduate at the University of Minnesota, he worked in a cosmic ray laboratory designing and building an X-ray telescope. But while continuing his studies in physics as a graduate student at the university, he was strongly attracted to the study of human behavior. He entered an ambitious program in behavioral sciences there that was designed to produce scholars who spanned the social sciences.

He worked as a research assistant conducting experiments on behavior and on the effects of mood-shifting drugs on social interaction. He developed an interest in mathematical models of learning and choice and made economics the lead field in his PhD program.

Following the completion of his PhD in 1962, he went to the University of Pittsburgh as a Mellon postdoctoral fellow. The following year, McFadden joined UC Berkeley's economics department. In just three years, he went from assistant professor to associate professor with tenure, said Obstfeld at the news conference.

"As far as I can gather, Dan had only one research paper in print at the time," he said. "But anyone who had come into contact with him or his unpublished work had already recognized his brilliance." This included 1983 Nobel Laureate Gerard Debreu, the department chair at the time, who, said Obstfeld, wrote to the campus administration that McFadden would have a career of exceptionally scholarly achievement.

In 1979, McFadden moved to the economics faculty at MIT. In 1991, he chose to return to UC Berkeley to take advantage of what he called the campus's "intellectual resources in economics, mathematics and statistics." He established UC Berkeley's Econometrics Lab, which Obstfeld said has made the campus an international leader in microeconometric research.

McFadden has had several visiting teaching appointments - at the University of Chicago in 1966-67, at Yale University in 1976-77 and at the California Institute of Technology in 1990.

Among his many awards and honors, McFadden received in 1975 the John Bates Clark Medal from the American Economics Association; was elected in 1977 to the American Academy of Arts & Sciences and to the National Academy of Science in 1981; was selected in 1985 to deliver the Jahnsson Foundation Lectures in Helsinki, Finland; won the Frisch Medal from the Econometrics Society in 1986 and, this year, received the Nemmers Prize in Economics from Northwestern University.

McFadden said he and his wife, Beverlee Tito Simboli McFadden, have a small farm and vineyard in Napa Valley, where they grow and sell grapes.

"I find that farm work gives me a chance to think about my research problems," said McFadden, "and energizes me for university life."

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