"I think of economics as a field that has a lot of important things to say about the world in terms of what is true and what we can do to help make people's lives better."

Into Indonesia

Indonesia's troubled economy has attracted plenty of attention in recent months as Western economists have tried to keep the Asian financial crisis from becoming a global recession.

But Tobacman says his work will not be focused on these broader issues.

The research he plans to conduct--like the work he continues to do for Laibson--is strictly microeconomics.

Instead of looking at the Indonesian economy as a whole, or how the Indonesian economy affects other economies, Tobacman will focus his work on interactions between banks and their customers.

He will begin his year working for the Harvard Institute for International Development (HIID). There he will help Bank Bakayat--a uniquely structured Indonesian bank comprised of a series of small "village banks"--determine what practices are most successful for its local banks.

Tobacman says the village banks provide an unusual level of intimacy between the customer and the bank.

"The village banks are interesting for how they very carefully design their programs with the knowledge of human behavior and psychology," he says. "People who work in the banks are very in touch with the people who take loans."

Tobacman adds that the village banks' effort to understand their customers' behavior is similar to Laibson's effort to model economic behavior.

"His research program broadly is all about trying to understand human behavior better and translate this understanding of human behavior into economic models which formalize behaviors and generate testable predictions," Tobacman explains.

But Tobacman does not plan on spending his whole year working at HIID.

"The work with HIID is a chance to contribute to a project that is meaningful and to get my feet on the ground," he says.

Tobacman is trying to figure out how to be sure that his work in Indonesia, like his work in the homeless shelters, has a direct impact on people. One option he's considering is working at a local branch of Bank Bakayat.

"I see [Bakayat] not just as an economic, profit seeking institution, but also as one that has enormous benefit for people who use the service," he says.