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Deaton wins economics Nobel Prize for work on consumption, poverty

12 October 2015 23:20 (UTC +04:00)

Baku-APA. 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, APA reports quoting Reuters.

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".

"While I expect things to get better, you have to keep remembering that we are not out of the woods yet and that for many, many people in the world, things are very bad indeed," Deaton told a press conference by telephone.

"I think the current upwards trends in inequality are very worrying in many contexts around the world," he added.

Those contexts include climate change and politics, Deaton said in a later news conference at Princeton University, where he is professor of economics and international affairs.

"I do worry about a world in which the rich get to write the rules," said Deaton.

Deaton also linked inequality and slower economic growth to a "terrifying increase" in middle-aged mortality in the United States, which he is currently studying.