What the 2021 Nobel Prize Means to SCM Research

This year’s Nobel Memorial Prize in Economics goes to David Card “for his empirical contributions to labour economics” and Joshua D. Angrist and Guido W. Imbens “for their methodological contributions to the analysis of causal relationships”. The Royal Swedish Academy of Sciences writes in a comprehensive article about the scientific background of this prize (PDF): “Taken together, […] the Laureates’ contributions have played a central role in establishing the so-called design-based approach in economics. This approach – aimed at emulating a randomized experiment to answer a causal question using observational data – has transformed applied work and improved researchers’ ability to answer causal questions of great importance for economic and social policy using observational data.” Similar to what is still widespread in SCM research today, the traditional approach to causal inference in economics relied on structural equation models at least until the 1980s, but, based on the laureates’ work on the local average treatment effect, natural experiments have become increasingly popular in economics. Unfortunately, almost no corresponding research exists in our discipline, but a certain number of natural experiments were carried out in related disciplines (e.g.; Lee & Puranam, 2017; Li & Zhu, 2021; Huang et al., 2021). Perhaps this Nobel Prize can serve as an inspiration for more natural experiments also in the SCM discipline?

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About Andreas Wieland

Andreas Wieland is an Associate Professor of Supply Chain Management at Copenhagen Business School. His current research interests include resilient and socially responsible supply chains.

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