British-born economist Angus Deaton won the 2015 economics Nobel Prize for “his analysis of consumption, poverty and welfare”, the Royal Swedish Academy of Sciences said on Monday (October 12).
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.
“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” the award-giving body said on announcing the 8 million Swedish crown ($978,000) prize.
Deaton also spearheaded the use of household survey data in developing countries, especially data on consumption, to measure living standards and poverty, the academy said.
Addressing the news conference over the phone, Deaton commented on the ongoing migrant crisis.
“What we’re seeing now in some sense is the result of you know hundreds of years of unequal development in the rich world which has left a lot of the world behind and those people who have been left behind would like better lives and that is putting enormous pressure on the boundaries between the poor world and the rich world,” he said.
Less than 10 percent of the world’s population lives in extreme poverty, new data from the World Bank shows. This marks the lowest that rate has ever been.
Committee member Mats Persson said Deaton’s work was significant in many ways.
“His research spans a large field but it’s all united in the common theme – consumption – and consumption is important in both practical and theoretical respects,” he said, adding that it was too early to apply Deaton’s work to the migrant crisis.
“The refugee crisis is going on right now and it’s far too early to say anything right now. But in principle, in the future when we have data on the refugees, when we know what kind of people come here, what are their consumption patterns, what are their work patterns, then his methods could be used to illuminate the particular problems that the refugees have,” he said.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel’s 1895 will.
Deaton, who was born in Edinburgh and holds both British and U.S. citizenship, is professor of Economics and International Affairs at Princeton University in the United States.
Story from Reuters.