Winning a Nobel just got slightly less lucrative:
On Monday the Nobel Foundation, which bestows the world’s most prestigious academic, literary and humanitarian prizes, said it was reducing the cash awarded with Nobel Prizes by about 20 percent. Each prize, awarded in Swedish kronor, will now be worth about $1.1 million, down from $1.4 million.
The reduction was the result of ugly returns on its invested capital, which was valued at $419 million as of Dec. 31, down 8 percent from the previous year. In the last decade, the costs of the prizes and related operating expenses have exceeded the endowment’s average annual return.
But Peter Diamond has some words of consolation for Sargent and Sims, the most recent winners:
Peter A. Diamond, a professor emeritus at the Massachusetts Institute of Technology who also received the Nobel in economic science in 2010, observed that over the long run, cutting the cash award could dilute the prize’s prestige.
But he added that Monday’s news overstates the financial blow to future laureates. “One of the things that comes with the prize, besides the prestige and the money,” he said, “is the opportunities to make more money.”
And it didn’t take very long for his words to come true:
Thomas Sargent, an American economist who won the Nobel Memorial Prize in Economic Sciences in 2011 together with Christopher Sims, will teach at Seoul National University (SNU) beginning this year.
The school said Monday Sargent, 69, currently a professor of New York University, will teach macroeconomics at SNU as a full-time professor for two years beginning the second semester of this year.
The economist has been serving as an advisor to the Bank of Korea since 2007.
“We are very proud to announce that Sargent has decided to join SNU,” said Park Myung-jin, the school’s vice president of education. “He will teach students as a full-time professor and conduct joint research with SNU faculty on various fields of economics.”
Sargent is expected to receive some 1.5 billion won ($1.27 million) annually, including salaries and research funds.
(thanks to Mark Witte and Daniel Lin for the pointers.)
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June 12, 2012 at 11:39 am
Lones Smith
Maybe they should get Eugene Fama to handle their investment portfolio. He could get paid with the Prize if he achieves a high enough return.
June 12, 2012 at 3:52 pm
twicker
Re: Diamond’s comment that it might reduce the prize’s prestige:
Um, how? By suddenly making it easier to get? Maybe for Diamond, it’s all (or largely) about the Benjamins, but I doubt that most people would be that worried about it.
June 12, 2012 at 7:54 pm
Lones Smith
That’s a mighty conservative draw-down. Putting aside the Economics Prize run by the bank, five prizes each paying out $1.1M on an endowment of $419M is just 1.3%. Is that two-thirds of its expected return?
http://www.irs.gov/charities/foundations/article/0,,id=136874,00.html