The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2015 was awarded to Angus Deaton "for his analysis of consumption, poverty, and welfare".
ANGUS DEATON: He is a UK and US citizen. He was Born 1945 in Edinburgh, UK. Ph.D. 1974 from University of Cambridge, UK. Professor of Economics and International Affairs, Princeton University, NJ, USA, since 1983.
PRIZE ANNOUNCEMENT:
- Announcement of the 2015 Prize in Economic Sciences 2015 by Professor Göran K. Hansson, Permanent Secretary of the Royal Swedish Academy of Sciences, on 12 October 2015.
INTERVIEW:
- After the announcement, Jakob Svensson, Member of the Committee for the Prize in Economic Sciences in Memory of Alfred Nobel, was interviewed by freelance journalist Henrik Höjer about the 2015 Prize in Economic Sciences.
DESCRIPTION:
CONSUMPTION, GREAT AND SMALL:
- To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. 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.
THE WORK FOR WHICH DEATON IS NOW BEING HONOURED REVOLVES AROUND THREE CENTRAL QUESTIONS:
- How do consumers distribute their spending among different goods? Answering this question is not only necessary for explaining and forecasting actual consumption patterns, but also crucial in evaluating how policy reforms, like changes in consumption taxes, affect the welfare of different groups. In his early work around 1980, Deaton developed the Almost Ideal Demand System – a flexible, yet simple, way of estimating how the demand for each good depends on the prices of all goods and on individual incomes. His approach and its later modifications are now standard tools, both in academia and in practical policy evaluation.