Nobel Prize for British-born economics pioneer
Angus Deaton, a Princeton University professor, has been recognised for his pioneering work on consumption patterns and living standards
The Nobel Prize in Economics was awarded to Angus Deaton yesterday; he has made breakthroughs in our understanding of consumption patterns, living standards and global poverty.
The Royal Swedish Academy of Sciences said Professor Deaton’s work showed an “impressive breadth” and had made “clear and lasting impressions in practical economic policy and in modern economic research … of immense importance for human welfare, not least in poor countries”.
Tyler Cowen, economics professor at George Mason University, said ProfessorDeaton was a “brilliant selection”. “Think of Deaton as an economist who looks more closely at what poor households consume to get a better sense of their living standards and possible paths for economic development,” he said.
Professor Deaton was born in Edinburgh in 1945, and studied at Cambridge University. He is currently professor of international affairs and professor of economics at Princeton, in New Jersey. He holds both American and British citizenship.
The Nobel committee cited three main strands to Professor Deaton’s work over the decades which it wished to recognise with the $978,000 (£640,000) prize.
In 1980, he co-developed the “Almost Ideal Demand System”, an i nnovative approach to estimating how patterns of consumer demand fluctuate in an economy.
In the 1990s, he revolu- tionised consumption theory again, showing how spending patterns vary among different groups. More recently his work on measuring consumption and poverty levels using household surveys has “helped transform” development economics.
Professor Deaton has criticised the aid programmes of rich countries such as the UK, arguing that they can be counterproductive. “The idea that global poverty could be eliminated if only rich people or rich countries were to give moneytopoorpeopleortopoor countries, however appealing, is wrong,” he wrote in 2013.
He also suggested aid programmes by governments tend to be “guided less by the needs of the recipients than by the donor country’s domest i c and i nte rn a t i o n a l interests”.
The Prime Minister has committed the UK to match the United Nations’ target of spending 0.7 per cent of GDP on foreign aid each year of this Parliament, even as other Whitehall departments have been told to expect budget cuts of up to 40 per cent by 2020.
The official title of the prize is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Professor Deaton’s work “shows an impressive breadth in its approaches: basic theory; statistical methods for testing theories; in-depth knowledge of the quality of existing data; and extensive work on producing new kinds of data,” said the committee.
“One common denominator in his research is the desire to build bridges between theory and data.”