UPDATED: Oct. 4, 2012, at 3:16 p.m.

The MacArthur Foundation announced Monday that Harvard economics professor Raj Chetty ’00 has been awarded a 2012 “genius grant” of $500,000 to explore creative passions and to pursue meaningful scholarship.

Chetty, whose work as a public economist focuses on equality of opportunity across the United States, said that he was “very surprised” to hear he had won the award, “because this is not an award that you can apply for.”

Chetty is one of 23 innovators to win this year’s batch of MacArthur Grants—commonly referred to as “genius grants”—which provide its recipients with a no-strings-attached award of $500,000 and guidance over the next five years for academic and professional pursuits.

Chetty said that he was “very excited and happy for the department” to hear that he had been awarded a MacArthur Grant. He said that he originally received the telephone call while having lunch with his mother in downtown Boston.

A public economist, Chetty’s work focuses on issues ranging from sales tax to teacher effectiveness. His research has included nuancing the economic assumptions of optimization, focusing on how people respond to tax changes. Chetty said that he is currently focusing on issues of equality.

“This type of award will allow me to focus more directly on that,” Chetty said. “I am hoping [the MacArthur Foundation] will give me more flexibility and time for a research group to work on really big projects.”

Students who have worked with Chetty said they were excited to hear that he had been chosen for the award.

“He’s unique because he’s very serious about economic theory, but also very serious about the real word and empirical stuff, and he combines the two of them in a very powerful way that I think sets him apart,” said Ph.D. student Adam M. Guren ’08, who is a former Crimson editor.

Chetty received tenure from the University at the age of 29, a mere eight years after graduating from the College summa cum laude.

Chetty seeks transparent answers to the questions that he works with, rather than “hiding behind abstract [math],” said Ph.D. student Peter N. Ganong ’09, an advisee of Chetty’s. “He emphasizes the importance of using data to get clear answers to policy questions,” he added.

Ganong said that in addition Chetty’s accomplishments as an academic, he has also served as an valuable adviser.

“He’s been a fantastic mentor to me...he puts a lot of time into reading my papers and always being available, and really pushing me to do my best,” Ganong said.

—Staff writer Sabrina A. Mohamed can be reached at smohamed@college.harvard.edu.