“My current research focuses on the determinants of health in rich and poor countries, as well as on the measurement of poverty in India and around the world,” declares the profile page of Prof. Angus Deaton, the winner of the 2015 Nobel Prize for Economics, who is the Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University.
Prof. Deaton is best known for his work on health, well being, and economic development. Measuring poverty is often based on snapshot surveys of income levels, but Prof. Deaton is lauded for adopting groups or cohorts of the population and examining the improvements, or not, in their well- being.
Much of his research concerns the trickledown theory and seeks to answer the question: why there has been so much growth in the world, and so little poverty reduction. For instance, he has written “the economic reforms of the early 1990s in India were followed by rates of economic growth that were high by historical standards. The effects on poverty remain controversial.”
The answer to this puzzle, he says, lies in deep contradictions between the data sources used to measure growth and those used to measure poverty. “The history of poverty lines in India is a case study in the interaction of science and politics, with political discussions often claiming a scientific basis, sometimes with justification, more often without,” he says in Data and Dogma: The Great Indian Poverty Debate that he co-authored with Valerie Kozel, who worked at the World Bank.
In an article he wrote for The Hindu last year, Prof. Deaton rejected most of the recommendations of the panel on poverty headed by former Reserve Bank Governor C. Rangarajan except for the one seeking that entitlement programmes in India be delinked from the poverty line and urged giving up of the BPL-targeting.
Valuable work
“Delighted to hear Prof. Deaton’s been awarded the Nobel … his work brought out rigour and organised thinking to the questions of consumption in India and remains valuable to our understanding of poverty,” National Institute of Public Finance and Policy Director and member of the task force Prime Minister Modi has set up on poverty, Rathin Roy, told The Hindu.
To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices, said the Royal Swedish Academy of Sciences said on Monday. “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.”
His recent work also covers assessment of the levels of happiness. Along with Daniel Kahneman, a psychologist who won the Nobel memorial prize in economics, he concluded that income is better at buying some forms of happiness than others. Prof. Deaton’s Nobel is recognition of the latest revolution in economics that lays emphasis on empirical studies, especially of data on individuals.
‘Far-reaching implications’
Development economist Jean Dreze called Prof. Deaton “not only a brilliant economist but also a formidable scholar and a great writer.”
“He has shown how intelligent use of survey data can illuminate momentous issues of human welfare and contribute to public reasoning,” Prof. Dreze said, adding: “Deaton’s work has important implications not only for the substance of economic policy in India, but also for the process of policy-making. On the substance, his work calls for significant rethinking of policy priorities, with much greater attention to the social sector in particular. On the process, Angus Deaton is very committed to the idea that public policy should be an outcome of democratic practice, as opposed, say, to professional expertise or randomised controlled trials. That, again, has significant implications since the Indian government is constantly trying to insulate economic policy from public debate.”
(Additional reporting by Special Correspondent)
