2015 Angus Deaton (b. 1945)

Angus Deaton (Princeton University, UK-born, 1945)

Citation: “For his analysis of consumption, poverty, and welfare.”

Angus Deaton was born in Edinburgh, educated at Hawick High School (at the same time as 2017 chemistry Nobel Laureate Richard Henderson), at Fettes, and at Fitzwilliam College, Cambridge, where he was an Exhibitioner in Mathematics. After a brief and undistinguished career in the Bank of England, he returned to academia, where he has remained. He was a research officer at the Department of Applied Economics in Cambridge, working with Sir Richard Stone on planning for growth. In 1975, he became Professor of Econometrics at the University of Bristol and moved to Princeton as Professor of Economics, Public, and International Affairs in 1983. He became a Senior Scholar and Emeritus Professor in 2016.

He is the author of almost two hundred papers in professional journals, and of six books, including The Great Escape: health, wealth, and the origins of inequality (2013), of Economics in America: an immigrant economist explores the land of inequality, (2023) and, with Anne Case, of Deaths of despair and the future of capitalism (2020), a New York Times best-seller.

His interests include health, happiness, development, poverty, inequality, and how best to collect and interpret evidence for policy. He is a member of the National Academy of Sciences of the USA, of the American Philosophical Society and, in Britain, a Fellow of the British Academy and an Honorary Fellow of the Royal Society of Edinburgh. He is a past President of the American Economic Association. He holds several honorary doctorates from universities in Europe and the US including Cambridge, Edinburgh, and St Andrews. In 2015, he received the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for his analysis of consumption, poverty, and welfare.” He was made a Knight Bachelor in 2016.

📅 Timeline of Key Contributions

1970s – Early Work

• 1974 – Consumer Demand in the UK, 1900–1970 → historical demand analysis.

• 1977 – Involuntary Saving Through Inflation → link between inflation & savings.

1980s – Breakthrough

• 1980 – Economics and Consumer Behavior (with John Muellbauer) → Almost Ideal Demand System (AIDS), landmark model of household demand.

• 1989 – Intertemporal Choice and Inequality → how households smooth consumption.

1990s – Poverty & Welfare

• 1992 – Understanding Consumption → synthesis of theory & data.

• 1997 – Analysis of Household Surveys → handbook for World Bank/development policy.

2000s – Development Economics

• 2003 – Health, Inequality, and Development → link between health & economics.

• 2006 – Measuring Poverty → critique & improvement of global poverty stats.

• 2008 – Income, Health, and Well-being Around the World → survey-based global welfare analysis.

2010s – Inequality & Nobel

• 2013 – The Great Escape: Health, Wealth, and the Origins of Inequality → historical/global perspective.

• 2015 – Nobel Prize awarded.

• Post-2015 – With Anne Case: research on “deaths of despair” in the US.

🔑 Contributions

1. Consumption Choices

   • AIDS model: how households adjust spending with prices/income.

   • Widely applied in tax, subsidy, and trade policy analysis.

2. Income, Savings & Consumption

   • Identified the Deaton Paradox: consumption is less smooth than theory predicts.

   • Challenged and improved intertemporal models of savings.

3. Poverty & Welfare Measurement

   • Advocated consumption (not just income) as better measure of living standards.

   • Improved poverty comparisons across countries.

   • Set standards for World Bank/UN poverty tracking.

4. Micro–Macro Link

   • Household-level data → insights on inequality, development, welfare.

   • Pushed economics toward evidence-based development policy.

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🌍 Impact

• Influenced World Bank, IMF, UN methodologies for poverty & welfare.

• Shaped debates on aid effectiveness & survey quality.

• Later health economics work showed inequality’s human cost in rich countries (US).

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📚 Key Works

• Economics and Consumer Behavior (1980, w/ Muellbauer).

• Understanding Consumption (1992).

• Analysis of Household Surveys (1997).

• The Great Escape (2013).

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📌 Takeaway

Deaton’s work connected theory → data → policy. He revolutionized how economists study consumption, poverty, and welfare, grounding macroeconomic debates in real household data and shaping global development policy.