Princeton's Angus Deaton wins 2015 Nobel Prize in economics

Angus Deaton of Princeton University was awarded the 2015 Nobel Prize in Economics for “his analysis of consumption, poverty, and welfare", including in the specific case of the developed world, with the aim of helping design better economic policies.

His Almost Ideal Demand System established links between demand for a single good, the prices of all products and individual incomes.

That had important implications for both the study of capital formation, or investment within economies, and the magnitude of business cycles, given that both are a function of the interplay between income and consumption.

Deaton’s novel approach showed why the analysis of individual data was key to untangling the patterns we see in aggregate data, the Royal Swedish Academy of Sciences said.

The economist’s work also made a fundamental contribution to improved economic forecasting and when evaluating the impact of policy alternatives.

In the field of Development Economics, he helped clarify the links between individual households’ consumption, calorie intake and the extent of gender discrimination within the family.

Specifically, the improvements he introduced into how aggregate data is collected, through surveys, gave this field of research an empirical foundation.

It was now no longer just theoretically-based.