Princeton economist wins Nobel for work on poverty
|
| Angus Deaton speaks at a gathering at Princeton University after it was announced that he won the Nobel prize in economics for improving understanding of poverty and how people in poor countries respond to changes in economic policy Monday, Oct. 12, 2015, in Princeton, N.J. Deaton, 69, won the 8 million Swedish kronor (about $975,000) prize from the Royal Swedish Academy of Sciences for work that the award committee said has had "immense importance for human welfare, not least in poor countries. |
Angus Deaton has dug
into obscure data to explore a range of problems: The scope of poverty
in India. How poor countries treat young girls. The link between income
inequality and economic growth.
The Princeton
University economist's research has raised doubts about sweeping
solutions to poverty and about the effectiveness of aid programs. And on
Monday, it earned him the Nobel prize in economics.
For
work that the award committee said has had "immense importance for
human welfare, not least in poor countries," Deaton, 69, will receive a
prize of 8 million Swedish kronor (about $975,000) from the Royal
Swedish Academy of Sciences.
Deaton's research
has "shown other researchers and international organizations like the
World Bank how to go about understanding poverty at the very basic
level," said Torsten Persson, secretary of the award committee.
He becomes the sixth scholar affiliated with Princeton to win the Nobel in economics since it was first given in 1969.
"That
lightning would strike me seemed like a very small probability event,"
Deaton said at a news conference at Princeton. "There are many people
who are worthy of this award."
Deaton grew up
in a family of modest means. "Not having money can give you a
perspective on the world that you don't get other ways," he said. "Most
people in my family thought I should be out (working) in the fields, not
reading books. Fortunately, my father didn't think that way."
For
Deaton, who was born in Edinburgh, Scotland, and holds dual U.S. and
British citizenship, everything starts with an analysis of data.
"Thinking about numbers hard is one of the things I think is really important," Deaton told The Associated Press.
Deaton
created tools that let governments in poor countries study how families
adjust spending in response to, say, an increase in the sales tax on
food.
"He's an economist's economist," said
Dani Rodrik, a Harvard colleague. Deaton has done "very careful,
detailed work" on data about poverty at the household level in poor
countries "so that one could understand the effects of changes in
policies on how people behave," Rodrik said.
Deaton
discovered that India had far more poor people in rural areas than
previously thought, a finding that led the government to expand
subsidies.
"Households that were not defined
as poor before can now be reached," said Ingvild Almas, associate
professor at the Norwegian School of Economics. "That is a direct result
of Deaton's research."
He also hit upon what
the Nobel committee called an ingenious way to discover whether families
in poor countries spent less to care for daughters than for sons. Among
other things, he studied how much households spent on "adult" items,
such as beer and cigarettes, to see whether families consumed things
differently depending on the sex of newborn children.
His surprising conclusion: They didn't.
Another
Deaton study challenged the once-popular notion that malnutrition
caused poverty by making people too weak to find work. He found the
relationship worked the other way: Being poor caused people to be
malnourished.
Deaton is physically imposing.
"He has football player dimensions," said David Warsh, who writes the
Economic Principals blog. And he isn't reluctant to voice strong
opinions.
"He's been very much forthright in
his criticism of facile solutions ... the development economics'
equivalent of a get-rich-quick scheme," said Daron Acemoglu, an
economist at the Massachusetts Institute of Technology.
"His work is
based on being meticulous at every stage."
In
his 2013 book, "The Great Escape," Deaton expressed skepticism about the
effectiveness of international aid programs in addressing poverty. He
noted, for example, that China and India have lifted tens of millions of
people out of poverty despite receiving relatively little aid money.
Yet at the same time, poverty has remained entrenched in many African
countries that have received substantial sums.
Deaton's
book drew criticism from Bill Gates, who runs a foundation dedicated to
fighting global poverty. The billionaire founder of Microsoft found
Deaton's critique of aid programs too broad.
"If
this is the only thing you read about aid, you will come away very
confused about what aid does for people," Gates wrote on his blog last
year.
Deaton has criticized the widening
income gap between rich and poor in the U.S. But he has not become a
darling of anti-inequality activists the way another Nobel-winning
economist, Columbia University's Joseph Stiglitz, has. That may be
because his views on inequality are complicated.
In
"The Great Escape," he wrote that "inequality can sometimes be helpful"
in promoting prosperity by giving people incentives to work harder and
more efficiently.
But last year Deaton wrote
that he worried that high-paying jobs in finance and other fields were
diverting talented young people from "more worthwhile pursuits."
He also warned that the very rich might be using their disproportionate influence to "write the rules in their favor."
Monday's
announcement concluded the selection of this year's Nobel winners. The
economics award isn't among the original prizes created by Swedish
industrialist Alfred Nobel in 1895; it was established generations later
as a memorial to him.
Deaton, who spends part of his summers fly fishing in Montana, told the AP that he has no big plans to celebrate.
"I'm just hoping it's not a dream which I'm going to wake up from," he said.
