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, and 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.
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 Royal Swedish Academy of Sciences’ award committee.
For Deaton, 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, 69, 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.”
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.
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 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, and they may work against the public provision of health care or education, for which they pay a large share but have little personal need.”
Deaton, who spends part of his summers fly-fishing in Montana, told the AP that he has no big plans to celebrate the prize, which comes with a $975,000 cash award.
“I’m just hoping it’s not a dream which I’m going to wake up from,” he said.
