# Eugene Fama > American economist and Nobel laureate in Economics **Wikidata**: [Q359317](https://www.wikidata.org/wiki/Q359317) **Wikipedia**: [English](https://en.wikipedia.org/wiki/Eugene_Fama) **Source**: https://4ort.xyz/entity/eugene-fama ## Summary Eugene Fama is an American economist and Nobel laureate in Economics, renowned for his foundational contributions to financial economics, particularly the efficient-market hypothesis. His work has profoundly shaped modern investment theory, asset pricing, and empirical finance, earning him global recognition and numerous prestigious awards. ## Biography - **Born**: February 14, 1939 - **Nationality**: American - **Education**: Tufts University (BA), University of Chicago (MBA, PhD) - **Known for**: Efficient-market hypothesis, empirical finance, asset pricing models - **Employer(s)**: University of Chicago (Booth School of Business) - **Field(s)**: Economics, Financial Economics ## Contributions Eugene Fama is best known for developing the **efficient-market hypothesis (EMH)**, which posits that asset prices fully reflect all available information, making it impossible to consistently achieve returns in excess of average market returns on a risk-adjusted basis. His 1970 paper, *"Efficient Capital Markets: A Review of Theory and Empirical Work,"* remains a cornerstone of financial theory. Fama also co-developed the **Fama-French three-factor model** (1992), which expanded the Capital Asset Pricing Model (CAPM) by adding size and value factors to explain stock returns. This model is widely used in investment management and academic research. He has authored or co-authored numerous influential papers and books, including *"The Theory of Finance"* (1972) and *"Foundations of Finance"* (1976). His work on empirical asset pricing and market efficiency has been cited extensively, shaping modern portfolio theory and financial econometrics. Fama is also associated with the **Fama-DFA Prize**, awarded for outstanding papers published in the *Journal of Financial Economics*. ## FAQs **What is Eugene Fama best known for?** Eugene Fama is best known for pioneering the efficient-market hypothesis, which argues that financial markets are informationally efficient, making it difficult for investors to consistently outperform the market. **Where did Eugene Fama study?** Fama earned his BA from Tufts University and his MBA and PhD from the University of Chicago, where he later became a faculty member. **What awards has Eugene Fama received?** Fama has received numerous awards, including the **Nobel Prize in Economic Sciences (2013)**, the **Morgan Stanley-American Finance Association Award (2005)**, and the **Deutsche Bank Prize in Financial Economics (2005)**. **What is the Fama-French three-factor model?** The Fama-French three-factor model is an asset pricing model that extends the CAPM by incorporating size (small vs. large companies) and value (high vs. low book-to-market ratios) as additional factors influencing stock returns. **What is the Fama-DFA Prize?** The Fama-DFA Prize is an award given annually for the best paper published in the *Journal of Financial Economics*, recognizing outstanding contributions to financial economics. ## Why They Matter Eugene Fama’s work revolutionized financial economics by providing a rigorous theoretical and empirical framework for understanding market behavior. His efficient-market hypothesis challenged traditional investment strategies, leading to the rise of passive investing and index funds. The Fama-French three-factor model became a standard tool for portfolio management and risk assessment, influencing both academic research and industry practices. Without Fama’s contributions, modern finance would lack key empirical and theoretical foundations, and investment strategies might still rely more heavily on speculative rather than data-driven approaches. ## Notable For - **Nobel Prize in Economic Sciences (2013)** for empirical analysis of asset prices. - **Efficient-market hypothesis (EMH)**, a foundational theory in financial economics. - **Fama-French three-factor model**, a widely used asset pricing model. - **Fama-DFA Prize**, an award for outstanding research in financial economics. - **Member of the National Academy of Sciences (NAS)** and the **American Academy of Arts and Sciences**. - **Professor at the University of Chicago Booth School of Business**, where he has influenced generations of economists. ## Body ### Early Life and Education Eugene Francis Fama was born on **February 14, 1939**, in Boston, Massachusetts. He earned his **BA in Romance Languages from Tufts University** in 1960. He later pursued graduate studies at the **University of Chicago**, obtaining an **MBA in 1963** and a **PhD in Economics and Finance in 1964**. ### Career and Academic Contributions Fama spent his entire academic career at the **University of Chicago Booth School of Business**, where he became one of the most influential figures in financial economics. His early work focused on **empirical tests of market efficiency**, leading to the formulation of the **efficient-market hypothesis (EMH)** in the late 1960s and early 1970s. In 1970, Fama published *"Efficient Capital Markets: A Review of Theory and Empirical Work,"* which became a seminal paper in finance. The EMH argues that financial markets are highly efficient in processing information, making it difficult for investors to consistently beat the market. In collaboration with **Kenneth French**, Fama developed the **Fama-French three-factor model (1992)**, which introduced **size and value factors** alongside market risk to explain stock returns. This model became a cornerstone of modern asset pricing and is widely used in both academic research and investment practice. ### Awards and Recognition Fama’s contributions have been recognized with numerous awards, including: - **Nobel Prize in Economic Sciences (2013)** (shared with Lars Peter Hansen and Robert J. Shiller). - **Morgan Stanley-American Finance Association Award (2005)**. - **Deutsche Bank Prize in Financial Economics (2005)**. - **Fellow of the Econometric Society, American Academy of Arts and Sciences, and National Academy of Sciences**. ### Influence and Legacy Fama’s work has had a profound impact on **investment theory, portfolio management, and financial regulation**. His research laid the groundwork for **passive investing strategies**, including index funds, which have grown into a multi-trillion-dollar industry. His empirical approach to finance has influenced generations of economists, and his models remain essential tools in financial analysis. The **Fama-DFA Prize**, established in his honor, continues to recognize cutting-edge research in financial economics. ### Personal and Professional Affiliations Fama has been affiliated with several prestigious institutions, including: - **University of Chicago Booth School of Business** (faculty member since 1963). - **National Bureau of Economic Research (NBER)**. - **American Finance Association**. His work has been cited in thousands of academic papers, and his theories are standard material in finance textbooks worldwide. Fama’s legacy as a pioneer in financial economics remains unparalleled, shaping both theoretical and practical aspects of modern finance. ## References 1. Integrated Authority File 2. [The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2013. nobelprize.org](https://www.nobelprize.org/prizes/economic-sciences/2013/summary/) 3. [Source](https://www.ifk-cfs.de/dbprize/2005.html) 4. [Source](https://www.econometricsociety.org/society/organization-and-governance/fellows/current) 5. [Source](https://afajof.org/morgan-stanley-american-finance-association-award-for-excellence-in-finance/) 6. [Source](https://clarivate.com/citation-laureates) 7. [Source](https://www.aei.org/press/nobel-winner-eugene-fama-to-receive-american-enterprise-institutes-irving-kristol-award/) 8. Mathematics Genealogy Project 9. CiNii Research 10. SNAC 11. Encyclopædia Britannica Online 12. Brockhaus Enzyklopädie 13. Munzinger Personen 14. Freebase Data Dumps. 2013 15. Virtual International Authority File 16. YouTube 17. Library of Congress Control Number 18. La France savante 19. Quora 20. Golden 21. Bibliography of the History of the Czech Lands 22. [Source](https://www.podchaser.com/creators/eugene-fama-107a9FW8iR/appearances) 23. Catalogo of the National Library of India