McFadden developed Nobel winning theory at MIT

Daniel L. McFadden, who shared this year's Nobel Prize in economics, began his prize-winning research at MIT, taught at MIT from 1978 through 1991 and still teaches here in the summer.

He is the 19th MIT professor and 47th member or former member of the MIT community who has won a Nobel Prize.

Professor McFadden, 63, whose development of theory and methods for analyzing discrete choice were used to calculate where San Francisco's Bay Area Rapid Transit stations should be located and what the fares would be, was contacted by e-mail at his office at the University of California, Berkeley.

He wrote back, "My work on transportation applications of discrete choice models was started when I first visited MIT in 1970-71, and grew out of a collaboration with Peter Diamond and Robert Hall.

"During that year, I lived on the same street as Bob Solow, and commuted with him between Concord and MIT. I found MIT a marvelous place to do economics, and although I returned to Berkeley at that time to direct a big NSF project on public transit in which a lot of my cited work on choice theory was done, it was an easy decision to move to MIT in 1978 when that project was over.

"I did a lot of research on choice theory during my 14 years at MIT, including the development of simulation methods for estimation and policy analysis and the use of choice models in marketing, an area that has turned out to be an important application.

"The decade following my arrival at MIT in 1977 was a wonderful time in the MIT economics department. The faculty had lunch every day at the famous round table, with Paul Samuelson, Bob Solow, Charlie Kindleberger and Franco Modigliani leading the discussion.

"Sitting with them was exhilarating, and a little intimidating. I had particularly close working relationships with Peter Diamond, Dick Eckaus, Frank Fisher, Jerry Hausman, Hank Farber and Paul Joskow, with Dave Woods over at the MIT Energy Lab, and with Moshe Ben-Akiva in civil engineering.

"I have one good story to relate," he said. "When I was appointed to the James Killian Chair, I went over to visit with Dr. Killian and his wife, and learned that his grandfather owned the cotton mill in which my grandfather was the chief mechanic. When I related this coincidence to Bob Solow, he said, 'So much for social mobility in America. Here you are, two generations later, still a mechanic in Killian's mill.'

"I returned to Berkeley in 1991 because it offered resources in computation and statistics that MIT was unable to match, but my tenure at MIT was both personally and professionally rewarding, and I very much appreciate having had the opportunity to be a member of the MIT faculty," he said.

He still comes back to MIT each summer to teach a course with Professor Ben-Akiva. "Dan McFadden and I have been co-teaching the summer course 14.61s (Individual Choice Behavior) for about 20 years," said Professor Ben-Akiva.

"While at MIT's Department of Economics, Dan taught a course, "Applied Econometrics," that was routinely taken by many engineering, planning and management students, in addition to economics students.

"Many of us have always known how brilliant Dan is and wondered when, not if, he would receive the Nobel Prize," said Professor Ben-Akiva. "What those who don't know him may not realize is how humble and gentle he is. When somebody would ask him from time to time what his chances were of winning a Nobel Prize, he would routinely answer 'about one in a million.'

"One of the reasons he left MIT for Berkeley was so that he could live on a farm in the Napa Valley and make wine," said Dr. Ben-Akiva.

"I tasted this wine and it's approaching the quality of his research for which he received a Nobel Prize."

A version of this article appeared in MIT Tech Talk on October 18, 2000.

Topics: Economics, Nobel Prizes


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