Hansen, Lars Peter (1952–…), an American economist, won the 2013 Nobel Prize in economic sciences. He shared the award with the American economists Eugene F. Fama and Robert J. Shiller. The men received the award for their research into how financial markets work and how prices for assets are set. Assets are such items as stocks (representing shares in ownership of a company) or real estate that individuals or businesses own. The three economists’ research suggests that changes in the prices of assets are difficult to predict in the short term. However, movements of asset prices can be more easily predicted over longer periods, such as three to five years. In some areas of research, their individual theories have conflicted.
Most of Hansen’s work has been in the field of econometrics (the application of statistical techniques to economic theory). In 1982, Hansen developed a statistical method known as the generalized method of moments. He used this method to evaluate asset-pricing models. Hansen’s research showed that the amount of risk an investor is willing to accept plays an important role in determining asset prices. People are less likely to take risks in bad times than they are in good times.
Hansen was born on Oct. 26, 1952, in Champaign, Illinois. He received a bachelor’s degree in mathematics from Utah State University in 1974. He received a doctorate in economics from the University of Minnesota in 1978. Hansen served as a faculty member at Carnegie-Mellon University from 1978 to 1981. He joined the faculty of the University of Chicago in 1981. Hansen has published many articles on subjects in the fields of econometrics and financial economics.
