Princeton economist wins Nobel Prize in economics

The bets are on as the last of Sweden’s Nobel prizes is set to be handed out in Stockholm on Monday, with British and United States economists among the frontrunners.

The secretary of the award committee for the Nobel economics prize says this year’s victor has helped researchers understand individual consumption choices and how they flow through an economy.

Scottish economist Angus Deaton has won the Nobel memorial prize in economic sciences for “his analysis of consumption, poverty, and welfare”, the Royal Swedish Academy of Sciences said Monday. “More than anyone else, Angus Deaton has enhanced this understanding”, it said.

Deaton will receive his prize at a ceremony in Stockholm on December 10, the anniversary of the death of the prizes’ creator, Swedish scientist and philanthropist Alfred Nobel.

“The academy said that Deaton’s work had been a major influence on policy making, helping for example to determine which social groups are affected by an increase of value-added tax on food”.

Still, the favourites are a host of decidedly more low-key professors at U.S. universities such as Indian-born Avinash Dixit of Princeton, American economist Robert Barro of Harvard and Finland’s Bengt Holmstrom at MIT.

Deaton’s use of household surveys “has helped transform development economics from a theoretical field based on aggregate data to an empirical field based on detailed individual data”, the committee says.

Firstly: “How do consumers distribute their spending among different goods?”

Secondly: “How much of society’s income is spent and how much is saved?”

Last year’s award went to Frenchman Jean Tirole of the University of Toulouse for his work on how governments can regulate industries from banking to telecommunications. It was not part of Nobel’s original will and was only created in 1968, sponsored by Sweden’s Central Bank (the Riksbank).

Deaton, 69, won the 8 million Swedish kronor (about $975,000) prize from the Royal Swedish Academy of Sciences for work that the award committee says has had “immense importance for human welfare, not least in poor countries”.