Great Scot!

Angus Deaton, 69, a Princeton University econometrician theorist and measurement economist, has been awarded the 2015 Nobel Prize in economic sciences for forty years of work on consumer behavior, concentrating in later years on well-being among the poor in the developing world.

His 1980 treatise, Economics and Consumer Behavior (Oxford), with John Muellbauer, of Oxford University, the source of their “Almost Ideal Demand System” of equations, is occasionally compared in its generality by enthusiasts of consumption theory to Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations

The prize to Deaton should have come as no surprise – he was among the featured speakers at a Nobel Foundation symposium on growth and development in 2012 – yet somehow it did. It is another of those awards for the development of conceptual tools useful mainly for building bridges between theorists and empirical economists. Similar awards have gone to Jan Tinbergen and Ragnar Frisch (in 1969); Trygve Haavelmo (1989); Daniel McFadden and James Heckman (2000); Robert Engle and Clive Granger (2003); Christopher Sims (2011); and Lars Hansen (2013).

The award bears a resemblance, too, to those given for measurement – to Simon Kuznets, in 1971, and Sir Richard Stone, in 1984. (Deaton was Stone’s student at Kings College, Cambridge.)  The Nobel program, technically the Swedish Central Bank Prize in Memory of Alfred Nobel, was inaugurated in 1969.

A bear of a man, born in 1945 into a family of coal miners, to a father who had the good fortune to  become a civil engineer, educated in Edinburgh, a college rugby player at Cambridge, Deaton is the sort of figure sometimes described as a man in full. He is a former president of the American Economic Association, the authority to whom the World Bank turned for an evaluation of its research activities, a feisty participant in the controversy over the utility of randomized controlled trials in social science.

An engaging writer, Deaton is author of The Great Escape:  Health Wealth, and the Origins of Inequality (Princeton, 2013);  of a crisp little autobiographical essay (“Puzzles and paradoxes: A life in applied economics,” and a series of pithy semiannual letters from America for the newsletter of the Royal Economic Society.  Widowed in 1975, he raised two successful children with his second wife, Helga Staby Deaton,  a child psychoanalyst; and collaborates frequently with his third, Anne Case, also a Princeton professor of economics. They entertain extensively in the manner he learned from Richard Stone in Cambridge, only, he says, without servants. Janet Currie, chairwoman of the Princeton economics department, described her former teacher to Binyamin Appelbaum, of The New York Times, as “enormously funny and witty and well-read, frighteningly erudite and very good company.”

Like an earlier econometrician-laureate, Heckman, of the University of Chicago, , Deaton has turned his attention to concrete problems having finished his tool-making days. Heckman conducts an ambitious program in early childhood development (and still produces an occasional methods paper).  Deaton, since The Great Escape appeared in 2013, Deaton has become a forceful spokesman for the view that better institutions, rather than more foreign aid, are the way to help the billion persons “left behind” in global poverty.  With an office next to fellow Nobel laureate Daniel Kahneman  (thinking, fast and slow) , Deaton has become interested, too, in the determinants of reported happiness around the world.

With its emphasis on growth and development, as opposed to the inequality that  inevitably accompanies it, The Great Escape makes an ideal companion to Thomas Piketty’s Capital in the Twenty-First Century (Harvard, 2014). That, too, may have been part of what the Nobel committee had in mind.

Leave a Reply

Your email address will not be published. Required fields are marked *