Indian Economist Wins Nobel

Amartya Sen, an Indian expert on poverty and hunger who teaches at Britain's Trinity College in Cambridge, won the Nobel Economics Prize today.

He was awarded the prestigious prize "for his contributions to welfare economics," which have helped in the understanding of the economic mechanisms underlying famines and poverty, the Royal Swedish Academy of Sciences said.

Sen, 64, has studied the Bangladesh famine of 1974 and other catastrophes in India, Bangladesh and the countries of the Sahara. Sen (whose first name is pronounced Ah-MAR-tya) joined Trinity College this year after teaching at Harvard University, among other institutions.

Sen, who has taught both economics and philosophy, "has restored an ethical dimension to the discussion of vital economic problems," the citation said.

Sen works in development economics, the study of the welfare of the world's poorest people. His best-known work, detailed in his 1981 book Poverty and Famines: An Essay on Entitlement and Deprivation, challenges the common view that the shortage of food is the most important explanation of famine.

Looking at several catastrophes, Sen has shown that "famines have occurred even when the supply of food was not significantly lower than during previous years" without famines, the citation said.

Part of his explanation of the 1974 Bangladesh famine is that flooding throughout the country significantly raised food prices, while work opportunities for agricultural workers declined as one of the crops could not be harvested. Due to these factors, the real incomes of agricultural workers declined so much that this group was disproportionately stricken by starvation.

Sen's award highlights an underappreciated area of study, said Scott Brown, chief economist at Raymond James & Associates, an investment firm in St. Petersburg, Fla.

"Developmental economics has never really gotten a whole lot of attention in the academic world, and certainly the magnitude of the problem and type of issues it deals with is obviously very significant," Brown said.

The prize was worth about $963,000 at Wednesday's exchange rate.

Sen's predecessors, Americans Robert Merton and Myron Scholes, won the 1997 prize for their work on how to value "derivatives" such as stock options. The award caught the attention of many because it recognized work with clear practical applications, rather than the highly theoretical work that usually gets the prize.

However, their work was tarnished last month when the hedge fund in which they were partners, Long-Term Capital Management, went bust, necessitating a $3.6 billion bailout.

It's not clear whether Long-Term Capital's failure was due to the misapplication of Merton's and Scholes' theories or whether the theories themselves were faulty. But the debacle inevitably tainted a prize that many have criticized.

This honor is the only Nobel ot established in the will of Swedish industrialist Alfred Nobel, who invented dynamite. It was created in 1968 to mark the tercentenary of Sweden's central bank.

On Tuesday, Robert B. Laughlin of Stanford University, Horst L. Stormer of Columbia University and Daniel C. Tsui of Princeton University won the Nobel physics prize for discovering how electrons can change behavior and act more like fluid than particles.

The chemistry prize went to Walter Kohn of the University of California at Santa Barbara and John A. Pople of Northwestern University for developing ways of analyzing molecules in chemical reactions.

On Monday, the medicine prize was given to three Americans Robert Furchgott, Louis Ignarro and Ferid Murad for their work on discovering properties of nitric oxide, a common air pollutant but also a life-saver because of its capacity to dilate blood vessels.

Furchgott is a pharmacologist at the State University of New York Health Science Center at Brooklyn, while Ignarro works at the University of California at Los Angeles and Murad is at the University of Texas Medical School in Houston.

The literature prize was awarded last week to Portuguese novelist Jose Saramago.

The peace prize, the last in this year's series, is to be announced Friday.

The prizes are presented on Dec. 10, the anniversary of the death of Nobel.

Written by Jim Heintz