Angus Deaton wins 2015 Nobel Prize in Economics

“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, ” Cowen wrote on his blog ” Marginal Revolution”. Answering this question is not only necessary for explaining and forecasting actual consumption patterns, but also crucial in evaluating how policy reforms, like changes in consumption taxes, affect the welfare of different groups.

In his most recent book, The Great Escape: Health, Wealth and the Origins of Inequality, Deaton argued that foreign aid from western governments has done more harm than good to developing nations. Deaton’s research has greatly influenced both practical policymaking and the scientific community.

The second, the Deaton Paradox, puts forth the idea that a shock to the income doesn’t necessarily mean a shock to consumption.

“There’s a real moral urgency to understanding how people behave and what we should or might be able to do about it”, Deaton said in an interview with the New York Times. Deaton proposed an ingenious way of using household consumption data to indirectly estimate whether daughters are given less than sons. His research has uncovered important ways of understanding the extent of poverty across time and space.

The Nobel Laureate has helped transform the fields of macroeconomics, microeconomics and development economics by linking detailed individual choices and aggregate outcomes.

Speaking to reporters by phone from Princeton, Deaton said that he expects extreme poverty in the world to continue to decline but that he isn’t “blindly optimistic”. “But I don’t want to sound like a blind optimist”.

He said there are “tremendous health problems among adults and children in India, where there has been a lot of progress”. “For many people in the world, things are very very bad”.

Asked about the refugee crisis sweeping Europe, Deaton expressed sympathy for those who have been uprooted by poverty and war. “But I do worry about a world where the rich get to make the rules”. In the short term.

“I am so thrilled for Angus Deaton”, said Cecilia Rouse, dean of the Woodrow Wilson School of Public and global Affairs.

Deaton said that his original mentor was Cambridge University Professor Richard Stone, who also won the Nobel Prize in Economics in 1984.

Amitabh Chandra of Harvard University described Mr. Deaton as “the Obi-Wan Kenobi of Economics”.

Dr Sen was awarded the Nobel Prize for Economics in 1998 for his contribution in the field of welfare economics. In anticipation of the announcement, we caught up with previous winners to find out what they’ve been doing in the years since.

Kenneth J Arrow, who was 51 years old when he was awarded in 1972 is the youngest recipient of the prize.

The economics prize does include the Nobel name – it’s officially “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” – so it’s often referred to as a “Nobel Prize” and carries the full weight of that distinction, to the dismay of a few scientists.