Angus Deaton

Angus Deaton was awarded the 2015 Nobel Memorial Prize in Economic Sciences for his analysis of individual consumption, poverty, and welfare. His work deeply analyzed how households spend their money and how individual choices impact overall economic welfare. He provided critical tools for measuring poverty and understanding economic development.

The Deaton Paradox suggests that while individual incomes vary wildly from week to week, individual consumption remains remarkably smooth. Deaton discovered this by analyzing detailed household survey data, challenging prevailing macroeconomic theories of his time. He demonstrated that consumers use savings and credit to insulate their spending from temporary income shocks.

Instead of relying solely on aggregate national data, Deaton advocates for analyzing detailed household consumption surveys to accurately measure poverty. He argued that looking at what people actually consume provides a much more accurate picture of their welfare than income metrics alone. This approach has heavily influenced how organizations like the World Bank track global poverty levels.

Angus Deaton is a British-American economist who was born in Edinburgh, Scotland, in 1945. He spent a significant portion of his prominent academic career at Princeton University in the United States. His dual background has given him a unique perspective on global inequality and living standards across different countries.