Vernon Smith Nobel Prize winner

When Vernon Smith, the former UA professor who was named a Nobel Prize winner Wednesday, left the UA a year ago, administrators knew he was a likely candidate for the award.

But without the money, space or support he needed to keep his research here, the university was unable to keep him from accepting a more lucrative offer at George Mason University.

The announcement of Smith's award came less than 18 months after the professor, who had worked at the UA for 25 years, packed up to move to the Virginia university.

With him went millions of dollars in potential grants and worldwide prestige, some administrators said.

Smith, known as the father of experimental economics, left for a professorship at GMU that paid nearly $80,000 more than his UA salary.

But pay was not the deciding factor, Smith said.

"The idea that we left because of salaries is baloney," he said. "We wanted to continue to grow and change and do new things, but we weren't given the opportunity (at UA). We were given the opportunity (at GMU)."

At GMU, Smith is paid $240,000, compared to the $163,992 he made at UA.

Smith's colleagues make $95,000 to $150,000 at GMU, a $50,000 to $60,000 increase from what they made at UA.

Smith pointed to the Interdisciplinary Center for Economic Science that he proposed six years ago at UA, which never materialized.

Since his June 2001 hire, Smith has already set up the research center at GMU.

He also took with him six staff members, who he regarded as his personal protŽgŽs, said UA economics department head Mark Walker.

"This is a dramatic example of the brain drain," said Mark Zupan, dean of the college of business and public administration.

The brain drain phenomenon has cost the UA dozens of faculty members who have left in recent years for higher-paying institutions, as the salary gap between public and private universities has grown.

Administrators have said that salaries at other university are as much as 40 percent higher than salaries at the UA.

Smith's colleagues were anticipating the Nobel win as early as the 1980's, said Provost George Davis.

Some are sorely disappointed it didn't happen at the UA.

"Here's someone who got the Nobel Prize for work he did here, but because of lack of resources, he was awarded the prize when he was at another university," said James Cox, a professor of economics who filled Smith's position as head of the Economic Science Laboratory after he vacated it last year.

"This is a made-in-Arizona Nobel Prize and George Mason is getting all the credit," said emeritus economics professor Edward Zajac.

Zupan knew Smith was unhappy with funding here at UA before he left for GMU.

"He had hoped for more in terms of state funding and in terms of space, which also required funding · If we had a different tuition structure and funding strategy five years ago, that could have avoided this."

Which is exactly what Smith said he advocated.

Smith said he told President Peter Likins that as state funding fell, it became time to raise tuition, allow universities to make more decisions independently and diversify the missions of the Arizona's public universities.

Likins said he does not remember having any such conversation.

Smith is a world-class economist and will be an asset to GMU, said GMU's President Alan Merten.

"It sends a message about the quality of the faculty," he said.

Although having a Nobel Prize winner on faculty is an obvious asset to a university, Likins said the UA can take consolation in knowing Smith's research was done here.

"In the general press there's a positive identification for the institution where the (Nobel Prize) winner happens to be at the time. But in academia, it is fairly recognized that the university where (the winner) did the work gets the credit, and everybody at the academy knows that where (Smith) did his work was at UA."

However, Smith's departure meant the university lost a lot more than a great professor, Walker said.

"It's always a loss when you lose really top-flight people," he said. "In the universities, you lose your reputation," he said.

The accumulative departure of high-profile professors from UA has been significant, Walker said.

"This is happening. We lost a lot more people who weren't Nobel Prize winners," he said. "The universities just aren't able to compete with the salaries of other universities."

Although faculty size has held steady over the years, the business college has been forced to replace full-time professors with temporary faculty.

"(We're) hollowing out internally," Zupan said.

Between 1989 and 1996, UA's business college lost 115 staff members, including 80- tenured faculty.

Since 1996, the college has lost 18 staff members, one of whom was Smith.

According to 2001 data from the Association of American Universities Data Exchange, the mean salary for a tenured professor in the college of business at the UA was $105,900 a year.

The mean for other peer institutions was $114,700 a year, and that gap grew to more than $15,000 a year when looking at average high salaries between the UA and peer institutions.

"Frankly, we have continuing concern of holding our faculty. He was one among many," Likins said.

While at the UA, Smith conducted many groundbreaking studies, including several that dealt with water use and water rights in the Southwest.

He was awarded the Nobel Prize in Economics for his work in behavioral economics, which integrates psychology and economics.

He will share the $1.08 million prize with Daniel Kahneman, a Princeton University professor, who was a co-recipient of the prize.

Sarah Nixon and Rebekah Jampole contributed to this report.