“His research,” the jury adds, “applies rigorous methods to important real world issues. Throughout his career, his work has been characterized by an attempt to understand empirical evidence in terms of a clearly articulated theoretical structure and the behaviors underlying the data.”

Deaton moved on from applying microeconometrics to analyze consumer demand to employ consumption as a key measure of welfare and poverty. “He has helped us to a better understanding of the relationship between consumption and income, while showing that there are parts of this relationship that do not work and need to be reformulated.”

So in contrast to the traditional approach taking per capita income as the yardstick of development, Deaton proposed using per capita consumption with a system of reference based on health, wealth and well-being, which in the jury’s view, “has made path-breaking contributions to development economics”.

Another distinguishing trait of his work is the use of detailed surveys in preference to the aggregate data of National Accounts. “He has focused particularly on the living standards of the poor in the developing world. He has championed the use of household surveys in these countries as an instrument for the better measurement of poverty and better understanding of poverty determinants.”

Deaton, in the words of the jury, “realized that GDP growth, consumption or car sales figures failed to offer a true picture of human well-being and that what was needed, especially in the case of the world’s poorest people, was more detailed information on consumption, calorie intake, spending on medicines or doctors’ or hospital visits.” Gathering such data requires large-scale household surveys with targeted questionnaires that offer a closer picture of individual conduct in areas critical for human wellbeing.

This level of detail and specificity allows for population segmentation and the subsequent assessment of policy impacts by reference to the economic behavior captured by the survey. A basic first step to estimate the number of poor people is to decide on a poverty line, which will depend on the price of the goods and services available for consumption.

Deaton’s work on price indexes and the selection of poverty lines has proved highly influential, by calling into question the official figures wielded by certain countries and international organizations. For instance, the application of his methods to poverty research in India has provided firm evidence that not all of society is benefiting from the economic growth of this emerging power, spurring an intense social and political debate.

Factors of well-being

Deaton has also turned his interest to the subjective factors of well-being. He was co-author with Nobel laureate Daniel Kahneman of a paper published in Proceedings of the National Academies of Sciences in September 2010 on the relationship between income and emotional well-being. The two men analyzed over 450,000 responses to surveys of U.S. residents run in 2008 and 2009, and found that while life evaluation rose steadily with annual income, the quality of the respondents’ everyday experiences did not improve beyond approximately $75,000 a year.

'What I am doing right now is to try to measure the crisis in different countries – European and South American, among others – and decide what steps we can take.'

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Another of his current concerns is the crisis and its repercussions: “What I am doing right now is to try to measure the crisis in different countries – European and South American, among others – and decide what steps we can take. In my opinion, there is little we can do to arrest this crisis. We have to be conscious of the moment in which we are living and accept the change of conditions many families are unfortunately going through in countries all around the world.”

Biography

Angus Stewart Deaton was born in Edinburgh (United Kingdom) on October 19, a bare one and a half months after the end of the Second World War. He earned a PhD from the University of Cambridge in 1974 then went on to teach econometrics at the University of Bristol from 1976 to 1983. His first contact with Princeton University was in 1979 as Visiting Professor, and he would later take up a full professorship at this institution, where he remains to this day.

He is a member of the Chief Economist’s Advisory Council of the World Bank and also a Senior Research Scientist for the Gallup Organization. His work on household survey methodology has led him to collaborate with such diverse organizations as the Committee of National Statistics of the National Academy of Sciences (United States), the Panel on Conceptual, Measurement, and Other Statistical Issues in Developing Cost-of-Living Indexes (U.S. National Research Council) or the Social Science Research Center of the Republic of China’s National Science Council.

Author of over 160 publications, he is a corresponding fellow of the British Academy, a fellow of the American Academy of Arts and Sciences, and of the Econometric Society and, in 1978, was the first recipient of this society’s Frisch Medal for an analysis of consumer demand in the United Kingdom over the first 70 years of the 20th century.

President of the American Economic Association in 2009, he holds honorary doctorates from the University of Rome, University College London and the University of St. Andrews (Scotland, United Kingdom), and has served successively as Associate Editor, Co-editor and Editor of the journal Econometrica (published by the Econometric Society and a worldwide in economics).

Aside from the professorship he occupies, Deaton has been the force behind a number of initiatives at Princeton University: the Center for Health and Wellbeing, the Office of Population Research, and the Research Program in Development Studies. He is also an associate of the National Bureau of Economical Research (NBER), a non-profit organization that brings together over 1,100 professors of economics and business currently working in North America. The NBER0s main areas of research concern are: developing new statistical measurements, estimating quantitative models of economic behavior, assessing the economic effects of public policies, and projecting the effects of alternative policy proposals.

International jury

The jury in this category was chaired by Guillermo Calvo, Professor of Economics and International and Public Affairs at Columbia University (United States), with Peyton Young, James Meade Professor of Economics at the University of Oxford (United Kingdom) acting as secretary. Remaining members were François Bourguignon, Director of the Paris School of Economics (France), Antonio Ciccone, ICREA Professor of Economics at Pompeu Fabra University (Spain), José Manuel González-Páramo, member of the Executive Board of the European Central Bank (Germany), Andreu Mas-Colell, Professor of Economics at Pompeu Fabra University (Spain) and Fabrizio Zilibotti, Chair of Macroeconomics and Political Economy at the University of Zurich (Switzerland).