The Economic Contributions of James J. Heckman and Daniel L. McFadden

This paper analyzes the economic contributions of Daniel L. McFadden and James J. Heckman, who were awarded the Nobel Prize in economic science in 2000. McFadden's analytical work on discrete choices and related theory brings economic tools to bear on policy questions that previously had not been empirically investigated. The multinomial logit and similar models developed by McFadden enable researchers to empirically model factors that affect individual choices (e.g. of travel mode, occupation or employment, and residential location) with discrete outcomes. Heckman's research on selective samples demonstrates the difficulty of achieving generalizable results in analyses of choice-based behavior. In addition, his work on the evaluation of social programs has challenged conventional beliefs about the infallibility of experimental evaluation results and explored the limits and potential of non-experimental methodologies in a range of social science applications.