A Princeton economics professor has won the Nobel Prize in economics for pioneering work on the consumer habits of haves and have-nots, with a special focus on the world’s poorest.
Angus Deaton was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2015, "for his analysis of consumption, poverty, and welfare." His work has proven pivotal in the effort to inform intelligent public policy.
“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” a Nobel Prize press release read. “More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics.”
A reader’s guide put out by the Nobel Prize committee further explained the significance of his research.
Deaton was awarded for “three related achievements,” some of which are highly technical. First, for improving economists’ ability to calculate consumer demand by identifying and removing “assumptions” made in old systems of measuring consumer activity. Second, for showing that it's better to track the consumption of individuals through time as opposed to groups, as individual “incomes fluctuate in an entirely different way to the average income.”
Third, for his body of “extensive research into consumption and poverty in developing countries,” particularly in India and South Africa.
Deaton’s research on poverty focused on malnutrition, living standards, and whether parents discriminate between boys and girls; broadly speaking, it helped researchers and policy makers to better track and measure poverty.
Deaton's recognition comes at a time in which we have witnessed a remarkable decline in global poverty. However, speaking at a press event Monday, he reminded that hundreds of millions worldwide still live in “something close to destitution.”
"You have to remember that we're not out of the woods yet," he said. "For many, many people in the world, things are very bad indeed."