The Frisch Medal has been established by the Econometric Society to encourage the creation of good applied work and its submission to Econometrica. It is given every two years for an applied article (empirical or theoretical) published in Econometrica during the past five years.
The selection committee for 2014 (John Rust, Chair; Steven Durlauf; Petra Todd) awarded the Frisch Medal of the Econometric Society to Flavio Cunha, James J. Heckman, and Susanne M. Schennach for their article, "Estimating the Technology of Cognitive and Noncognitive Skill Formation", Econometrica, 78(3), May 2010, 883-931.
"Estimating the Technology of Cognitive and Noncognitive Skill Formation” provides a comprehensive framework for analyzing the evolution of cognitive skills and personality traits across the different stages of childhood. Nonparametric identification is shown to hold for a general class of production technologies in which endogeneity of inputs is allowed. A parameterized version of the production function model uses the NLSY79 Children data to estimate the various parameters that govern the trade-offs between early and late investments in producing adult skills. The paper identifies the presence of critical and sensitive periods in the life cycle, indicating that some skills are more easily acquired during certain stages, which in turn matters for optimal timing of investment over the life cycle. It is a powerful demonstration of the value of formal methods in elucidating policy questions of the highest importance.