Deaton wins economics Nobel Prize for work on consumption, poverty

Mon Oct 12, 2015 4:04pm EDT
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By Daniel Dickson and Anna Ringstrom

STOCKHOLM (Reuters) - Economist Angus Deaton has won the 2015 economics Nobel Prize for his work on consumption, poverty and welfare that has helped governments to improve policy through tools such as household surveys and tax changes.

The Royal Swedish Academy of Sciences said the British-born microeconomist's work had been a major influence on policy making, helping for example to determine how different social groups are affected by specific changes in taxation.

"To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices," the award-giving body said in announcing the 8 million Swedish crown ($978,000) prize.

"More than anyone else, Angus Deaton has enhanced this understanding," it said.

Deaton, 69, has spearheaded the use of household survey data in developing countries, especially data on consumption, to measure living standards and poverty, the academy said.

Deaton looks at economic development from the starting point of consumption rather than income, wrote Tyler Cowen, economics professor at George Mason University and blogger.

"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 the blog Marginal Revolution.

In his first public comments after winning the prize, Deaton said that while extreme poverty has fallen sharply in the last 20 to 30 years and that he expected this trend to continue, he did not want to sound like a "blind optimist".   Continued...

British-born economist Angus Deaton of Princeton University answers questions in a news conference after winning the 2015 economics Nobel Prize on the Princeton University campus in Princeton, New Jersey October 12, 2015.  REUTERS/Dominick Reuter