Robert Shiller, co-creator of the Case-Shiller home price index, is one of three Americans to be awarded the 2013 Nobel Prize in economics. The committee recognized Robert J. Shiller (Yale University), Eugene F. Fama (University of Chicago), and Lars Peter Hansen (University of Chicago) for the empirical analysis of asset prices.
Their individual works helped improve our understanding of asset markets and the tendency of asset prices to be very difficult to predict in the short-run but even less so in the long-run. Shiller’s contribution was to examine the relationship between stock prices and corporate dividends.
The analysis recognized by the committee undoubtedly informed Shiller’s later work on housing and asset bubbles. Shiller co-developed the Case-Shiller home price index in part to provide the housing market with a better indicator of short and long-run conditions. The index created is widely viewed as the leading measure of U.S. residential real estate prices.