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The Young Economist

From the January/February 2007 Issue

At age 26, Jesse Shapiro practices accessible economics. ‘I’m Happy to Do That.’

In the Malkin Penthouse of Harvard’s Kennedy School of Government, janitors worked in the fading light of afternoon to dismantle coffee urns and rear­range furniture. They also tried, gently, to disperse the crowd that had gathered around a 26-year-old academic wunderkind named Jesse Shapiro. Shapiro, who received his Ph.D. in economics from Harvard in 2005, is a fellow at the University of Chicago’s Becker Center. He was wrapping up a brief triumphal tour of Cambridge with a one-day guest appearance. He could easily have used this custodial nudging to beg off any further discus­sion. Instead, he moved the freewheeling seminar that was dissecting his presentation—“What Drives News Media Slant?”—to a narrow passageway downstairs. Never flustered, always engaged, Shapiro defended his work, pausing occasionally to jot down a bit of constructive criticism.

“The whole fun of giving seminars or presenting a paper is the give and take with the audience,” Shapiro said later. For many of his challengers, the respect was mutual. “This is one of the best studies in this area I’ve seen in 35 years,” says Benjamin Compaine, who teaches at Northeastern University.

Jesse Shapiro (500)

Shapiro and his co-author, Matthew Gentzkow, applied a “revealed preference…measure” based on partisan keywords—such as “estate tax” versus “death tax”—to a wide slate of U.S. newspapers, cross-referenced with the voting preferences of readers. Shapiro and Gentzkow found that even the most ideological newspaper owners face market discipline. The political bias of a particular paper is much more likely to match the voting preferences of its local audience than the beliefs of its owner.

Shapiro has rapidly grown to prominence in his field by finding clever ways to apply economic princi­ples outside traditional areas. Topics have included the roots of obesity in America, how TV ads affect urban development, the effect of prison on inmates, and the role of charisma in U.S. elections.

His topics have included the roots of obesity in America, the religious divide between Republicans and Democrats, the effect of prison on inmates, the role of charisma in American elections, and where media bias comes from.

For that last project, Shapiro and co-author Daniel Benjamin showed subjects silent video clips of unfamiliar gubernatorial debates. The subjects were then asked to predict the vote share each can­didate would receive. Their snap judgments turned out to have more predictive power than traditional economic variables did. But when Shapiro and Benjamin turned the sound on, the predictions became less accurate. Their conclusion? “Naiveté may be an asset in some forecasting tasks.”

The son of a Brooklyn high school special-educa­tion teacher and a private school college counselor, Shapiro was not always destined for the academy: “I knew I really liked economic theory, but it wasn’t until college that I began to understand this was a set of tools you could apply very widely.”

Shapiro received his B.A. in economics, summa cum laude, and his M.A. in statistics from Harvard at the same time in 2001. He won a National Science Foundation graduate research fellowship and another from the libertarian Institute for Humane Studies in Virginia. Now, he and his wife, Emily Oster, who got her Harvard economics Ph.D. in 2006, are the inaugural fellows at the Becker Center on Chicago Price Theory. Oster, whose current work involves the economics of infectious disease, is “also one of the best young economists in the country,” says Tyler Cowen, a George Mason University economist who runs the blog Marginal Revolution. “You have this incredible power cou­ple—a dynamic duo, either of whom is completely over­whelming intellectually.”

As for his work, Shapiro says, “I try to work on issues that are either relevant to public policy or the source of some controversy, or…topics that are poorly understood, by me as much as anybody else. To the extent that it is possible to write and commu­nicate in a way that makes what I’m doing accessible to a more general audience, I’m happy to do that.”

Exceedingly modest, Shapiro prefers to play down his personal story. When asked if his parents were proud of him, he demurred, preferring to move on and focus on his work, not himself.

Others are less restrained. “Jesse’s work shows explicitly how economic analysis can provide con­siderable insight into real world problems,” says Gary Becker, the Nobel Prize–winning economist and namesake of the institution whose support lets Shapiro immerse himself in research, with the occa­sional workshop and seminar thrown in.

What’s ahead? Jesse is working on another thorny topic: the role of the profit motive in distributing life-saving drugs to developing countries. More crowds will gather around that one.

 

Photograph by Saverio Truglia


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