Angus Deaton wins Nobel Prize in Economics

Angus Deaton of Princeton University was awarded the 2015 Nobel Prize in Economics for his analysis of consumption, poverty, and welfare, the Royal Swedish Academy of Sciences said yesterday.

When the academy called from Stockholm, “I was pretty sleepy … I was delighted,” Mr Deaton said. “Like many economists, I knew this was a possibility, and was delighted to hear.”

The 69-year-old’s research has focused on health in both rich and poor countries, as well as on measuring poverty in India and around the world, according to his website.

Fans were quick to applaud the choice. “Angus Deaton is the Obi-Wan Kenobi of economics,” Amitabh Chandra of Harvard University said in a tweet.

Born in Scotland, although now also a citizen of the United States, Mr Deaton obtained his PhD from the University of Cambridge. His 2013 book The Great Escape maps the origins of inequality and its fallout spanning 250 years of economic history.

“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” the academy said. “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.”

Mr Deaton’s early research has helped to develop a greater understanding of consumer spending patterns and how people adapt their consumption to their incomes. His more recent focus on household surveys has helped to change development economics from a theoretical field based on aggregate data to an empirical field based on detailed individual data, according to the academy.

The recognition the prize carries has helped previous winners bring their economic theories closer to policymaking.

Past laureates include Milton Friedman, James Tobin, Paul Krugman and Friedrich August von Hayek. Last year’s award went to the Frenchman Jean Tirole of the University of Toulouse for his work on how governments can regulate industries from banking to telecommunications.

Annual prizes for achievements in physics, chemistry, medicine, peace and literature were established in the will of Alfred Nobel, the Swedish inventor of dynamite, who died in 1896. The prize in economic sciences was added by Sweden’s central bank in 1968. The total amount for each of the 2015 prizes is 8 million kronor (Dh3.6m).

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