The Economics Nobel Prize winner is Angus Deaton

by on October 12, 2015 at 7:01 am in Economics, History, Science | Permalink

A brilliant selection.  Deaton works closely with numbers, and his preferred topics are consumption, poverty, and welfare.  “Understanding what economic progress really means” I would describe as his core contribution, and analyzing development from the starting point of consumption rather than income is part of his vision.  That includes looking at calories, life expectancy, health, and education as part of living standards in a fundamental way.  I think of this as a prize about empirics, the importance of economic development, and indirectly a prize about economic history.

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.  He truly, deeply understands the implications of economic growth, the benefits of modernity, and political economy.  Here is a very good non-technical account of his work on measuring poverty (pdf), one of the best introductions to his thought.

He brought a good deal of methodological individualism to the field of consumption studies, most of all by using household surveys more than macroeconomic data.

I think of this as a prize for “a whole body of work” rather than for one or two key papers.  David Leonhardt has a good NYT summary of some his work and its deep underlying optimism about the situation of the poor in the global economy.

Here is the popular version of the Committee statement, here is the more detailed version (pdf), an excellent overview.

Deaton was born in Scotland but has taught at Princeton for some time.  Here is Deaton on Wikipedia.  Here is Deaton’s home page.  Here are some recent working papers, he even has published in Review of Austrian Economics, an interesting review of Bill Easterly on experts.  Here are previous MR mentions of Deaton, there are many of them.  Here is Deaton on Google Scholar.  Here is a Russ Roberts EconTalk with Angus Deaton.  I think of Deaton as someone who is relatively willing to share himself with the world, let’s hope the Prize doesn’t ruin that openness.  Here is 21 minutes of Angus on YouTube, on his core ideas.

He is married to Princeton economist Anne Case, a notable scholar in her own right and sometimes a co-author with Deaton.  Here are their co-authored papers, many dealing with South Africa.

Deaton has long had a special working relationship with India and South Africa.  Here are his key pieces on measuring poverty and poverty reduction in India.  Here is his work on the Indian health survey.  Here is his 2010 AER piece on how to measure poverty globally in a consistent manner, by the way he suggests that asking people should be part of the answer.

He also has written on gender discrimination within the family in developing nations.  Some of his work has helped direct our attention to the viability of cash transfers as a way of fighting poverty.

At first, say circa 1980, he was known for his work in developing Almost Ideal Demand Systems for analyzing consumer expenditures; much of this early work was with Muellbauer.  That made a big splash, but it was more of a theoretical and technical advance than what was to follow.  One message was that studies based on the idea of a “representative consumer” were likely to prove misleading.

It is interesting to note the trajectory of his career, as Alex noted on Twitter.  He first did theory, then filled in the numbers and did empirics, applying the theory.  Eventually he took theory + empirics and used it to tackle some of the big issues of poverty and development.

Here is his long survey piece on foreign aid and growth.  He favors the move away from project evaluation, is skeptical of instrumental variable methods, and believes that RCTs need to be supplemented with a better theoretical understanding of mechanisms.  He knows a lot about many, many topics.

I do not know him, but he is described by many as a colorful character.  Dani Rodrik has strong praise for Deaton as a teacher.

Here are short, popular essays by Angus Deaton; you can call that the “what he really thinks page.”  He is critical of the Republican war against ACA and connects that topic to Downton Abbey.  He argues for regional price indices for the United States.  He discusses American inequality and why it is often ignored as an issue.  He warns against the creeping regulation of science.  And he considers why the Stern report had a greater impact in the UK than in America.

I very much liked Deaton’s recent book The Great Escape, which focuses on how modernity revolutionized standards for consumption.

This award is no surprise at all and he has been on the short list for a while.  Is it a slight surprise that Deaton won this prize on his own?  Many thought he would be paired with Anthony Atkinson, but I see Deaton as worthy of a stand-alone prize and Atkinson’s chance has not passed him by.  In any case, Tirole was a stand-alone prize too, so maybe in that regard there has been a shift in the Swedish regime.

Last but not least here is Alex’s post on Deaton.

1 londenio October 12, 2015 at 7:06 am

Very good choice. How many comments until someone shares de petty objection that this is not a “Nobel prize”.

2 Owen October 12, 2015 at 7:11 am

This is not a comment about that not being a Nobel prize.

3 dearieme October 12, 2015 at 7:43 am

It’s a genuine counterfeit Nobel Prize. The best counterfeiters are Central Banks, after all.

4 Art Deco October 12, 2015 at 8:31 am

Alfred Nobel stuck the world with the Peace Prize and the Literature Prize. The people who conjured the Economics Prize are actually slumming it.

5 Ed October 12, 2015 at 7:09 am


6 londenio October 12, 2015 at 7:15 am

As a Marketing/IO type of econometrician, I had to study the AIDS was the first demand system I studied in detail. Great contribution, even though most people today (including myself) use the random utility framework (logit, probit, etc.) to analyse consumption to study mergers, pricing policies, welfare, etc.

7 londenio October 12, 2015 at 7:21 am

A surprising number of his papers are single-authored (a Princeton thing I believe). Perhaps, there was no natural pairing for the prize.

8 rayward October 12, 2015 at 7:44 am

With many blog posts opposing foreign aid (private and public) to LDCs (doing bad by doing good), it’s as though Cowen anticipated this selection. Deaton is known for micro and is optimistic about our (the world’s) future. What’s not to like. Here’s a quote from David Leonhard’s review of The Great Escape: “Yet Deaton’s central message is deeply positive, almost gloriously so. By the most meaningful measures — how long we live, how healthy and happy we are, how much we know — life has never been better. Just as important, it is continuing to improve.” Maybe that’s why he was selected, with pessimism being the prevailing view among so many. But there’s one area in which Deaton is deeply pessimistic: foreign aid, private as well as public: “Like [Peter] Singer, I am privileged to teach at Princeton. I too see students who want to relieve suffering in the world. Should they go to Dhaka or Dakar? Focus on bed nets or worms? I tell them to go to Washington or London and to work to stop the harm that rich countries do; to oppose the arms trade, the trade deals that benefit only the pharmaceutical companies, the protectionist tariffs that undermine the livelihoods of African farmers; and to support more funding to study tropical disease and health care. Or they could go to Africa, become citizens, and cast their lot with those they want to help. That is how they can save the lives of African kids.” [This quote by Deaton is taken from the forum held in Boston on July 1st titled “The Logic of Effective Altruism”.]

9 dearieme October 12, 2015 at 7:46 am

“Deaton works closely with numbers”: go on. Stone the crows! Knock me down with a feather!

10 DWhite October 12, 2015 at 7:52 am

“…deep underlying optimism about the situation of the poor in the global economy. ”
I guess he does not consider the effects of resource limits in a finite world, or general environmental degradation including climate change.

11 Art Deco October 12, 2015 at 9:52 am

Because, you know, Paul Ehrlich and the Club of Rome have proven so prescient.

12 Alain October 12, 2015 at 10:55 am


13 Todd Kreider October 12, 2015 at 12:08 pm

Since exponential growth, not just +1, but +1 ^e!

14 Gochujang October 12, 2015 at 6:24 pm

While there is no doubt that Paul Ehrlich and the Club of Rome lost, there has been a steady degradation of natural services. I am not saying that, large ocean fish could be gone by 2050, but apparently you can model it that way.

Perhaps Ehrlich and the Club erred in a sort of excessive pessimism, the sort that defeats more realistic forms of pessimism.

15 Ricardo October 13, 2015 at 3:07 am

There is an incentive problem in the prediction business. If you predict a catastrophe and it doesn’t happen, you will be mocked for the rest of your life. On the other hand, if you fail to predict a catastrophe that does occur — say, the global financial crisis and depression of 2008, experience shows your reputation won’t suffer much if at all.

That’s not to defend Ehrlich or alarmism that is not clearly backed by science. But the underlying logic of concern over limited resources and unconstrained population growth is sound. If population grows by 1% per year, a rule of thumb says that population will double every 72 years. Fast forward 720 years in the future and population is 1,000 times what it is now. In another 720 years, it would be 1 million times. The obvious conclusion is that exponential population growth is not sustainable in the very long run. Fortunately, it seems enough people in the world are marrying late and/or using contraceptives that population will probably stabilize within the next century.

16 Art Deco October 13, 2015 at 12:39 pm

On the other hand, if you fail to predict a catastrophe that does occur — say, the global financial crisis and depression of 2008,

This country suffered a 5% decline in the rate at which goods and services were produced between June of 2008 and May of 2009. The unemployment rate was high but below the peaks seen during the recessions experienced during the period running from 1973 to 1982. Not exactly a social catastrophe. A number of Mediterranean countries have suffered chronic trouble, but that’s a function of superlatively bad monetary policy which they’ve persistently refused to correct.

17 Art Deco October 13, 2015 at 12:36 pm

You might try policing your domestic fisheries, setting a global budget for fish harvesting, and auctioning off tranches to commercial fishermen. Spewing out dreck in popular science literature for three decades seems to lack a sense of the relationship between ends and means.

18 Nathan W October 12, 2015 at 10:09 am

One of the main remaining issues I have with the method is that it still uses caloric consumption as a proxy for nutrition, citing someone or another else who defends the idea that if you get 2000 calories then presumably it comes from a varied source.

However, the poorest in the world almost never enjoy a varied diet, and 2000 calories a day is almost always missing out on proteins and fresh produce, implying widespread deficiency in many nutrients.

19 dearieme October 12, 2015 at 10:45 am

“Deaton was born in Scotland” sounds almost like an evasion. He didn’t move to the US until he was almost forty.

20 Brian Donohue October 12, 2015 at 3:14 pm

Score one for the Celts!

21 Ray Lopez October 12, 2015 at 10:56 am

Sounds like the Nobel Prize for Econ committee is:

(1) trying to save money by awarding one Nobel a year…sign of hard times,

(2) emphasizing more safe “micro” rather than “macro” pioneers (good move)

(3) once again rewarding the obvious, I mean c’mon, how obvious is: (i) having a hypothesis, (ii) testing the hypothesis with data from the field, and, (iii) modifying the hypothesis in view of data? You get $1M for this? Sheet, they should award me the Nobel, as I am pioneering backyard chicken farming in the Philippines (lots to say about this topic, but I’m not about to tell you any of it, it’s all proprietary, like all really good information is)

22 Nathan W October 12, 2015 at 12:10 pm

2) I think there has been somewhat of a move among some to set aside some aspects of macro, and get working on micro underpinnings to apply to more aggregated levels. (Not sure if this checks out statistically .. maybe it’s just a bias in what I’m more aware of.) Household-survey driven microsimulations, then applied to the macro level, is one example that immediately comes to mind.

23 Gochujang October 12, 2015 at 3:37 pm

At the close of Misbehaving, Thaler laments the lack of Behavioral Macroeconomics, but then gets in his dig that it is because BE is based on finding anomalies through data, and nothing in macro is really falsifiable.

Perhaps the post Great Recession skepticism is sticking.

24 leppa October 12, 2015 at 3:11 pm

The money remains the same whether awarded to 1 or 2 or 3; it just gets divided.
More important if only one gets , its harder for others in the same field : like Avinash Dikshit and perhaps Jagdish Bhagwati in case of Krugman’s.
Atkinson , now in case of Deaton’s prize.

25 Ray Lopez October 12, 2015 at 7:03 pm

Good points made by Nathan, G*, leppa. On my third point, keep in mind academics reward public data, public information, public knowledge. Think of all the proprietary data that is never published that is a lot more powerful (and acted on) that will never win a (measly, from a monetary viewpoint) Nobel Prize cash award, but earns multinational corporations lots of money. This phenomena is due to the relatively weak copyright laws (sorry AlexT) that exist. Why publish valuable data if there’s no incentive to do so? Let others independently discover it. Same is true for patents. Of course rogue employees, independent creation (very common), and migration of employees resulting in diffusion of knowledge are the great equalizers.

26 Ray Lopez October 12, 2015 at 7:14 pm

@myself – just to be clear, I am aware of laws against the copyright of facts (and the patenting of laws of nature). I implicitly am saying that these laws should be done away with. If you, a researcher, publish a valuable fact you should be compensated in my ideal world. It would make for the wider dissemination of data. Lost wax, the formula for concrete (besides pozzolan, naturally occurring concrete), super-strong china (Korea, aka ‘stoneware’ and of nearly metallic quality, with composition still not entirely known) and even (say some) electroplating in the early C.E (Persia), heavier than air flight (China kites), and possibly toy jet powered flight (Hellenistic Greece) were all discovered and lost due to weak IP laws, and had to be rediscovered. Bad.

27 Gochujang October 12, 2015 at 7:26 pm

The problem with your worldview is that you are fundamentally a non-innovator, who does not know why actual innovators innovate.

Related: Only 3 percent of Silicon Valley startup founders identify as Republican

28 Tom October 15, 2015 at 1:53 am

Why would anyone want to identify as Republican in Silicon Valley? You will probably get fired when you’re found out.

It’s a bit amusing that even so this nest of Progressives, as they themselves point out, is so extremely racist, sexist and homophobic. Clearly there has not been enough purging.

29 Nathan W October 13, 2015 at 7:46 am

Patenting nature … yeah, it’s been at least a decade since Monsanto was trying to do this but were slapped down by the courts. There are several reasons to doubt the company’s good intents, but this alone will be sufficient to distrust their every move for at least some decades.

30 Cyril Morong October 12, 2015 at 11:05 am

Thanks for posting all of this great information

31 rayward October 12, 2015 at 12:44 pm

Cowen and Tabarrok have chosen to ignore Deaton’s provocative writings and statements about excessive inequality, preferring instead to focus on Deaton’s criticism of foreign aid (public and private) to the poor in Africa and Asia, criticism Cowen and Tabarrok share. That’s okay, as it’s far more productive to emphasize common ground than differences. Deaton considers excessive inequality as both a social and an economic problem, not simply an excuse to confiscate the property of the rich. Indeed, Deaton’s writings about excessive inequality are more provocative than the writings of Piketty, who seems to view inequality as a social issue. Awarding the Nobel to Piketty would have been considered too political. Awarding the Nobel to Deaton accomplishes the some goal (greater attention to the economic issue of excessive inequality) without the corresponding political fallout. It was brilliant!

32 Bob from Ohio October 12, 2015 at 1:06 pm

“Awarding the Nobel to Deaton accomplishes the some goal (greater attention to the economic issue of excessive inequality) without the corresponding political fallout. It was brilliant!”

Hardly anyone outside the economic profession cares a single bit about the views of the award winners. To the extent any care about the winner at all, it is mainly what country the winner is from.

One unknown (to the general population) economist is the same as any other unknown economist.

33 rayward October 12, 2015 at 1:11 pm

Nothing to see here, let’s move along. That strategy may work. Cowen’s and Tabarrok’s strategy, more diversionary than anything, may work better.

34 Nathan W October 12, 2015 at 1:18 pm

Right. No one cares. And that’s why it’s being announced in every major media outlet on the planet.

35 Bob from Ohio October 12, 2015 at 6:07 pm

“And that’s why it’s being announced in every major media outlet on the planet.”

So? They announce Oscar winners widely too.

That is not evidence that a winner’s views has any impact on policy or politics which I took to be rayward’s point.

Without looking it up, please id the last winner. You might know it because you comment on an econ blog but not 1 in 10,000 could do so.

Then explain the winner’s impact on anything.

[I also said “Hardly anyone”. Obviously some care, its just not too many.]

36 Nathan W October 13, 2015 at 7:51 am

Bob – Hmm. Good point. But I’m not sure whether direct policy application should be the measure of success.

Did Einstein change the world? Affect a policy? Yet, he revolutionized our understanding of the universe.

Can’t name last year’s winner. The only ones I remember are Olson, who I read extensively in preparing my thesis on conflict and farm investments/depletion in soil productivity, and Sen, because I’ve read a fair few of his articles and he’s cited in a lot of stuff I read.

37 Gochujang October 12, 2015 at 3:40 pm

A friend was most interested in which university gets an improvement in Nobel count.

38 dearieme October 12, 2015 at 5:39 pm

Well, he did all his studying at Cambridge, then worked there and at Bristol. He’s spent many years in Princeton, and has doubtless had lunch in the faculty club at Harvard, so there’s four claimants right away.

39 Tom October 15, 2015 at 1:55 am

“Born in Europe, Deaton has done most of his work while associated with Harvard.”

40 E. Harding October 12, 2015 at 8:16 pm

No, inequality is not inherently a problem. What makes you think that?

41 Nathan W October 13, 2015 at 12:07 am

Most people are bothered by inequality. But some wealthy people manage to live a sheltered enough life that they don’t run into it much, and so it doesn’t bother them.

Sharing is natural. So is greed.

Americans identify their ideal as far more equal than it is:

Americans are way off base in how bad inequality is:

The present matters.

42 Art Deco October 13, 2015 at 12:31 pm

Most people are bothered by inequality.

No, they’re not. People bothered by ‘inequality’ per se are pretty unusual and confined to college faculties, and their irritation is often astonishingly distorted. (I knew a peripheral faculty member one place who quit socializing with other faculty because she got sick of the continuous bitching about salaries; if you played the anthropologist at these gatherings, you got to the heart of it: the faculty were comparing their incomes to those of lawyers).

43 Nathan W October 14, 2015 at 1:29 am

Did you read the links?

Perhaps you don’t care about inequality, but the people who disagree with you are not limited to academia.

If what you say were true, political parties would not campaign on efforts to reduce inequality. That alone is very strong evidence that it matters to a lot of people.

44 E. Harding October 12, 2015 at 8:18 pm

rayward, you used to make good comments, but all this time, you’ve been posting nothing but leftist crap. You’re almost as bad as prior and mulp these days.

45 Nathan W October 13, 2015 at 7:57 am

How do you define “crap”? Anything “leftist”?

46 Art Deco October 13, 2015 at 12:27 pm

1. Peppering people with kooky unsourced internet memes (Kennedy assassination aficionados are the champions at this, but purveyor of vulgar leftism sometimes enter the sweepstakes).

2. Status games (manifest in discussions of gun control and ‘global warming’, and homosexuality).

3. Audacious lying (see the entire history of 14th amendment jurisprudence).

4. Rhetorical gamesmanship in lieu of argument (manifest in discussions of the Near East).

47 Nathan W October 14, 2015 at 1:36 am

1) Kookly unsourced internet memes are by no means limited to the lef.t

2) People who disagree with you on gun control, AGW and homosexuality are not playing status games. They are defending a position that they believe is important.

3) Audacious lying is not limited to the left.

4) Rhetorical gamesmanship in lieu of argument is not limited to the left.

That you perceive these as defining factors of the left, which then presumably do not apply to the right, does not suggest that you have a very impartial view of things.

48 Art Deco October 13, 2015 at 12:33 pm

I almost forgot random paring of sentence fragments drawn from the work of opinion journalists who know nothing much but how to put out money losing publications. A lot of rayward’s babble sounds like it was generated by some app which takes phrases out of old issues of Mother Jones and Monthly Review and strings them together.

49 Economist October 12, 2015 at 1:10 pm

You should invite him on “Conversations with Tyler”. I think you could get him to talk about a lot that is both novel and relevant.

50 Martin October 12, 2015 at 3:03 pm

There is no Nobel Prize in economics. The economics prize was created by Sweden’s Central Bank in 1969 and is called the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” It was not established by Nobel, but supposedly in memory of Nobel. It was done completely against the wishes of the Nobel family.

51 The Original D October 12, 2015 at 3:10 pm

In related news, it turns out the World Series only covers North America.

52 leppa October 12, 2015 at 3:13 pm

Same with thr World Football champions, the Patriots.

53 Pshrnk October 12, 2015 at 6:30 pm

Not even Mexico. But there will be the Confederations Cup!

54 Nathan W October 13, 2015 at 7:59 am

It only makes it about 50 miles across the border, to Toronto, the only team outside of the USA.

55 Brian Donohue October 12, 2015 at 3:16 pm

Well, that took long enough.

56 Gochujang October 12, 2015 at 3:41 pm

If you can’t be fast at least be slow

57 E. Harding October 12, 2015 at 8:17 pm

Hey, it’s that guy on the Internet from Dilbert!

58 Leon Garoqui October 12, 2015 at 4:09 pm

To try to get rid of poverty…it’s a quimera.
To try to explain poverty is simple: Find out why rich people exists?
What to do with poverty? Read Deuterenomius v:17. An then you will understand where the mistake was done and by whom.

59 Nathan W October 13, 2015 at 12:10 am

Yes, God made them poor because they are horrible demon worshipers.

Or does God have a special place in his heart for the poor?

If you think you are Christian, I dare say not very.

Poverty is not easy to explain.

60 Barkley Rosser October 12, 2015 at 5:08 pm

The real question has not been Piketty, but why not Atkinson sharing this? Deaton is a bit more senior and did develop the emphasis on consumption, along with all that jumping up and down about ideal demand systems that the committee seems to think is really important (I do not). Deaton certainly deserves it, but if this means Atkinson will never get it, well, that is too bad.

61 Andrew Worsnop October 12, 2015 at 11:28 pm

The link for “his long survey piece on foreign aid and growth” doesn’t seem to be working?

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