CFSP Economists Kaboski, Townsend Awarded 2012 Frisch Medal for Paper Evaluating Microfinance Programs

Second Win for Townsend
July 2, 2012

(Chicago, IL)  CFSP economists Joseph P. Kaboski of the University of Notre Dame and Robert M. Townsend of Massachusetts Institute of Technology have been named the 2012 recipients of the prestigious Frisch Medal of the Econometric Society for a ground-breaking paper they wrote on the structural evaluation of microfinance programs. The paper was supported, in part, by CFSP.

The Frisch Medal is awarded every two years for the best empirical or theoretical applied paper published in the journal Econometrica during the previous five years. Econometrica launched in 1933 and publishes work from all branches of economics, with a particular emphasis on applied economics. The winning paper, “A Structural Evaluation of a Large-Scale, Quasi-Experimental Microfinance Initiative,” was published in the September 2011 issue.

Kaboski and Townsend’s work is one of the first structural attempts to model and comprehensively evaluate the impact of large-scale microfinance programs. The authors used data they captured as part of the Townsend Thai Data project, a monthly household panel survey that Townsend has led since 1997, to evaluate the impact of the Thai government’s Million Baht Village Fund, one of the largest microfinance initiatives of its kind.

The selection committee said the paper, was noteworthy for “its combination of rigorous theory and careful econometrics to produce important insights into a major development policy.” Steven N. Durlauf of the University of Wisconsin-Madison chaired the committee, which included Douglas Bernheim and Nicholas Bloom, both of Stanford University, and Michael Keane of University of New South Wales.

With this announcement, Townsend also becomes the first economist to win the medal twice. He was previously awarded the prize in 1998 for his paper, “Risk and Insurance in Village India.”

Joseph P. Kaboski is the David F. and Erin M. Seng Foundation Associate Professor of Economics at the University of Notre Dame. His research focuses on growth, development and international economics, with an emphasis on structural change, finance and development, schooling and growth, microfinance, explaining international relative price patterns, and the role of inventories in international trade. He has published papers in the American Economic Review, Econometrica, the Journal of the European Economic Association, the Journal of Economic Theory, and many other scholarly journals. He is a Research Associate of the National Bureau of Economic Research and an affiliated researcher with the Consortium on Financial Systems and Poverty. He has previously been an assistant professor at Ohio State University and a visiting professor at the University of Chicago. He received his Ph.D. in Economics from the University of Chicago in 2001.

Robert M. Townsend is the Elizabeth & James Killian Professor of Economics at the Massachusetts Institute of Technology and faculty director of CFSP. He is a theorist, macroeconomist, and development economist whose recent work focuses on analyzing the role and impact of financial systems on developing economies by studying applied general equilibrium models and contract theory. He is the author of Financial Structure and Economic Organization (1990), The Medieval Village Economy (1993), Households as Corporate Firms (2010) with Krislert Samphantharak, Financial Systems in Developing Economies (2011), and numerous professional articles in economics and development.

Townsend has been on the faculty of MIT since 2008. Prior to that, he taught at the University of Chicago, where he remains a Research Associate. Townsend also leads several prominent research initiatives, including the Townsend Thai Project and the Enterprise Initiative. 

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Pictured: Robert M. Townsend