Angus Deaton wins Nobel for economics

Angus Deaton, a renowned microeconomist, was awarded the Nobel Memorial Prize in Economic Science on Monday for his studies of consumption, poverty and welfare.

Professor Deaton, 69, of Princeton, is best known for his study of the choices of individual consumers.

"By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics and development economics," the Royal Swedish Academy of Sciences said in its citation. The academy said it had honoured Professor Deaton for his findings on three key questions: how consumers distribute their spending among different goods; how much of society's income is spent and how much is saved; and how to best measure and analyse welfare and poverty.

The prize comes as hundreds of thousands of people fleeing war, poverty and persecution have risked their lives to reach Europe, many after perilous journeys.

Professor Deaton, who phoned in to the news conference announcing the prize, attributed the pressures to "hundreds of years of unequal development in the rich world, which has left a lot of the world behind." Professor Deaton was humble about the impact of his scholarship. "Those people who've been left behind would like better lives, and that's putting enormous pressure on the boundaries between the poor world and the rich world," he said.

"I'm not sure that understanding leads to a solution for the very difficult problems that are facing Europe right now."

The prize was announced in Stockholm by Goran K Hansson, permanent secretary of the Royal Swedish Academy of Sciences.

The committee in recent years has honored a number of academics for work showing either that markets are inefficient or how to deal with that reality. Last year, the committee picked Jean Tirole, a French economist, for his work on the effective regulation of imperfect markets. In 2013, it honored Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller for their research on the movements of financial markets.

The economics prize is the newest of the Nobels, established in 1968, in Alfred Nobel's memory, to celebrate the 300th anniversary of the Sweden's central bank, the world's first.

Professor Deaton joins 75 laureates - including Milton Friedman, Friedrich von Hayek and Amartya Sen - who have been honored since the prize was first awarded, in 1969.

The prize is 8 million Swedish kronor (about $976,000). More than 80 per cent of the economics laureates have been American citizens. Only one woman has won: the political scientist Elinor Ostrom, in 2009.

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