British academic Angus Deaton has been awarded the Nobel economics prize for 2015 for his analysis of consumption, poverty, and welfare.
His research focused on health, wellbeing, and economic development.
Professor Deaton had been in the running for the prize several times in past years.
The Nobel economic sciences committee said that individuals’ consumption choices must be understood before economic policy promoting welfare and reducing poverty could be formulated.
“More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics,” the committee members said.
The work for which Edinburgh-born Professor Deaton has been honoured revolves around three questions:
How do consumers distribute their spending among different goods?
How much of society’s income is spent and how much is saved?
How do we best measure and analyse welfare and poverty?
The secretary of the award committee, Torsten Persson, said 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.”
Persson praised Deaton’s work for illustrating how individual behavior affects a broader economy and demonstrating that “we cannot understand the whole without understanding what is happening in the miniature economy of our daily choices.”
Deaton, who was born in Edinburgh, and holds U.S. and British dual citizenship, said he was delighted to have won the prize and was pleased that the committee had awarded research that concerns the world’s poor.
“His research has uncovered important pitfalls when comparing the extent of poverty across time and place,” the committee said.
In his 2013 book, “The Great Escape,” Deaton expressed skepticism about the effectiveness of international aid.
He noted, for example, that China and India have lifted tens of millions of people out of poverty despite receiving relatively little aid money. At the same time, many African countries have remained mired in poverty despite receiving substantial aid.
“His view is that we don’t have these ready-made solutions, and money is not going to be the answer to many things,” Rodrik said.
The award includes prize money of 8m Swedish kroner (£637,000).
The economics award was not created by Alfred Nobel in 1895, but was added by Sweden’s central bank in 1968 as a memorial to the Swedish industrialist. The Nobel prizes will be given to winners on 10 December at ceremonies in Stockholm and Oslo.