Deaton may win economics Nobel Prize
Thompson Reuters cited Deaton for his “empirical research on consumption, income and savings, poverty and health and well-being,” according to the press release. Most recently, he has been researching what is called “subjective well-being,” or more simply, “happiness.”
If Deaton wins the field’s highest honor, it will be the third time in the last five years that a Princeton economist has won the award. In 2008, Wilson School professor Paul Krugman won the award, and last October, economics professor Christopher Sims won. New York University professor Thomas Sargent, who collaborated with Sims, also won the award last year while he was a visiting professor at Princeton.
Deaton said in an interview that though he was aware of his name being tossed around as a potential winner, he does not expect to win the award.
“It really is a great honor to be thought of in this company, but I’m not counting my money on the winning,” Deaton said with a chuckle.
Deaton explained that he may be considered a leading contender because his field of specialization appeals to the decision-makers in Stockholm. Among the four economists on Thompson Reuters’ prediction list, MIT professor Stephen Ross and Yale professor Robert Shiller work in finance, whereas Deaton works in a similar field as Sir Anthony Atkinson, a researcher at Oxford.
“We’re both interested in well-being in a broad sense: in measuring income, income inequality and how well people do in their lives,” Deaton said. “This issue of looking at well-being and thinking about inequality and incomes and outcomes is something that has not been recognized by the Nobel Committee for quite a while,” he explained.
Deaton noted, however, that the prediction method is far from perfect. Thompson Reuters determines likely candidates for the Nobel Prize by looking at the number of times their work has been cited and using this as a measure of their influence in the profession. Deaton said that this approach is “not a perfect count of things.”
“Sometimes some papers get cited very heavily, but nothing else the person has done is cited. So it’s a rather mechanical procedure,” he explained.
Deaton also said that given Princeton’s success last year in the same field, the Nobel Prize committee might do a double take before awarding the same department at the same university the same prize.
“Given that Princeton got a Nobel Prize last year, it’s a bit much to expect lightning to strike the same place twice in a row. But you never know. It could happen, and it would be nice,” Deaton said.
Previous winner Sims said that one of the difficulties in speculating the possibility of a candidate’s winning the prize is that the Nobel Committee does not announce who is being considered.
“There is no official list,” he said. “The Nobel Committee gets nominations from prominent people all over the profession, but they take that information and do a lot more research. So it’s not just a matter of counting citations.”
Sims noted that he himself was listed among likely candidates for many years before he won the prize.
“And some people are on it for many years but never get the prize,” he added, “Deaton certainly deserves to be on the list, but I think it’s a mistake to focus on any one name.”
Deaton, who is British, initially became interested in economics as a mathematics student and “sort of drifted into economics,” as he put it. Deaton credits Wilson School professor Daniel Kahneman — who won the Nobel Memorial Prize in Economic Sciences in 2002 — with inspiring his interest in the specific area of subjective well-being,
“He tried to get me interested in this and succeeded,” Deaton said, whose office was next to Kahneman’s.
In a recent study, Deaton and Kahneman surveyed 450,000 people in a recent survey and found that after individuals earned an income of $75,000, they were no happier with additional income.
“We wonder how happy people are and try to find out why that occurs,” Deaton explained.
Deaton has also researched the determinants of health in rich and poor countries with a focus on reducing research flaws by using household surveys instead of national accounts data. His analysis of household surveys aims to more accurately determine the living standards of poor people and to measure poverty in developing countries. He has worked, for example, with the Indian government to ameliorate poverty reduction methods.
He has also collaborated with former Wilson School dean Christina Paxson, who is now the president of Brown. Deaton and Paxson predicted that measuring well-being by looking at per-capita income does not take into account factors such as sizes of households and differences in needs of adults and children. They therefore used factors such as consumption, caloric intake and spending on healthcare instead of income to measure wealth and poverty in the world’s poorest areas.