Angus Deaton, the Dwight D. Eisenhower Professor of Economics and International Affairs at the Wilson School and the economics department at the University, was awarded the Nobel Memorial Prize in Economic Science, the Royal Swedish Academy of Sciences announced Monday.
The prize is eight million Swedish krona, or about 977,000 U.S. dollars. The list of laureates is prepared by the Committee for the Prize in Economic Sciences in Memory of Alfred Nobel, and the Royal Swedish Academy of Science chooses the winner.
Deaton said at a news conference in Richardson Auditorium on Mondaythat while receiving the Nobel Prize was something he thought of as a possibility, he was certainly not awake at 6 a.m. anticipating a phone call. In fact, he thought he was unlikely to get the Nobel Prize because he had never worked in a specific field and instead explored many different areas.
The center of what he does is measurement, Deaton said. He explained that his first mentor, Sir Richard Stone, a Cambridge economist who won the Nobel Prize in 1984, had instilled this passion in him.
“I feel passionately about measurement, about how difficult it is, about how much theory and conceptualization is involved in it, and indeed how much politics is involved in it,” Deaton said.
When asked about the most important lesson he learned during his time as an economist, he said that while his answer would have been different at various points in his life, he nowconsiders the most valuable lesson he has learned to be the importance of understanding statistics at a serious level.
The Royal Swedish Academy of Science did not respond to requests for comment.
Chair of the economics department Janet Currie explained at the news conferencethat Deaton received the Nobel Prize for his work on consumption, poverty and welfare.Through his work, Deaton was able to analyze the impact of individuals on policy by understanding that decisions of individual consumers aggregate to the economy as a whole, Currie said.
“Looking at the people behind the numbers has led him to consider the relationship between economic policy, allocational resources in the household, and consumption and savings over the life cycle,” she said.
Currie also noted Deaton’s passion for measurement and understanding the details of how the numbers we work with every day are put together.
Deaton earned his B.A., M.A. and Ph.D. at the University of Cambridge in 1975, and was born in Edinburgh, Scotland in 1945.
He explained that during his childhood, many of his family members worked in the fields and were uncomfortable with his staying inside reading books. This background made him aware of the importance luck has in people’s lives, he added.
“There are these strokes of luck that, if you read around the world, they would be shuffled in very different ways,” Deaton said.
Deaton said that while the world is becoming a better place and many humans enjoy a higher standard of living than they did several hundred years ago, inequality has become a serious threat with enormous ramifications for politics and climate change.
“I don’t think you could describe the United States as being owned by some small faction,” he said. “But I do worry about a world where the rich get to make the rules.”
Economics professor Smita Brunnermeier explained that Deaton’s individualistic approach to analyzing data has made economists more cognizant of the context behind government or survey data numbers that come out. Currie noted that because Deaton’s work emphasizes the importance of understanding individual behavior for comprehending what goes on in the aggregate economy, it is highly related to many economic disciplines including microeconomics, which focuses on the individual, and macroeconomics, which focuses on the aggregate.
Deaton’s colleagues, Currie said, are delighted to hear of his receiving the Nobel Prize.
“It seems a very timely recognition of lifetime contributions that have been really important to many people in this department,” she said.
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