The Contributions of Angus Deaton

Date01 July 2016
AuthorTimothy Besley
Published date01 July 2016
DOIhttp://doi.org/10.1111/sjoe.12186
Scand. J. of Economics 118(3), 375–396, 2016
DOI: 10.1111/sjoe.12186
The Contributions of Angus Deaton
Timothy Besley
London School of Economics and Political Science, London WC2A 2AE, UK
t.besley@lse.ac.uk
Abstract
Angus Deaton was awarded the 2015 Sveriges Riksbank Prize in Economic Sciences in
Memory of Alfred Nobel for his analysis of consumption, poverty, and welfare. This article
reviews his contributions to economics.
Keywords: Consumption; poverty measurement; well-being
JEL classification:D10; D31; I30
I. Introduction
Angus Deaton was awarded the 2015 Sveriges Riksbank Prize in Economic
Sciences in Memory of Alfred Nobel for “his analysis of consumption,
poverty, and welfare”. The study of consumption is fundamental to eco-
nomics and is a crucial input in human welfare. Deaton has been at the
forefront of the field throughout his career, and much of what he has
written has shaped developments in the area, setting research priorities.
An understanding of what drives consumption is important for design-
ing economic policies. For example, a government that is contemplating
putting a tax on sugar to fight childhood obesity should only do so in full
knowledge of how consumption patterns vary across households, and how
households are likely to respond to such a tax. Angus Deaton’s research
has provided us with ways of thinking about the estimation of demand
systems and their use in the study of taxation.
Many policy debates centre on how living standards have changed as
societies develop, in particular how gains (or losses) are distributed. Gov-
ernments are held to account for their record on such things, and a proper
empirical and conceptual framework is needed. The same goes for looking
at how different regions within a country fare. Any economist or policy
analyst who looks carefully at the issues will learn a lot from studying
Angus Deaton’s work, which has examined how the consumption of indi-
viduals relates to economic development in society at large, bringing out a
series of methodological and practical issues. He has also considered how
patterns of mortality, life satisfaction, and morbidity relate to developments
in the economy.
CThe editors of The Scandinavian Journal of Economics 2016.
376 The contributions of Angus Deaton
Policy-makers also spend time worrying about what drives saving be-
haviour. A range of policies are in place to promote savings, either to
provide a buffer stock against unforeseen events or as a source of support
in later life. Here too, researchers will encounter Angus Deaton’s path-
breaking research on savings and incomes.
However, while his work is immediately applicable and useful, Deaton’s
contributions are also intellectually ambitious and rigorous. His work has
fuelled debates within the discipline of economics, and is taught in class-
rooms all over the world. The work addresses fundamental questions that
lie at the core of economics.
In this short paper, I discuss some of his work in order to offer the
reader a flavour of the many important contributions that led to his being
honoured with a Nobel Prize. My perspective is subjective and sketchy, and
no substitute for reading his work. The breadth of Deaton’s work makes it
difficult to do full justice to the full range of his achievements in a short
appreciation. He is one of the leading applied economists of his generation.
His career spans a period in which empirical work was becoming more
important and approaches to it were changing, from requiring main-frame
computer technology through to the “push-button” revolution in applied
research. There has also been an enormous increase in the quality and
quantity of available data. Deaton has been a pioneer throughout his career,
pushing forward the research frontier.
It is also difficult to appraise Deaton’s contribution in an entirely con-
sistent way, because his research style and priorities have evolved as he
has developed his views on applied research, and new data have created
fresh ways of looking at issues. However, while his specific interests have
also changed over time, there is a common core and a distinctive approach
to the way that he has developed his research, which I will endeavour to
bring out in the remainder of this paper as I discuss his work.
Angus Deaton was born and brought up in Scotland. He earned his
bachelor’s and PhD degrees at Cambridge, after which he worked initially
at the Bank of England before returning to Cambridge as a researcher
in the Department of Applied Economics. He subsequently moved to the
Economics Department at Bristol, before moving to Princeton University
where he remains, with a joint appointment in the Economics Department
and Woodrow Wilson School of Public and International Affairs. Among
Deaton’s important early influences were Richard Stone and W.M. (Terence)
Gorman who were his foremost mentor and examiner, respectively. While
Stone was to became a Nobel laureate, Gorman’s pioneering contributions
in consumer theory are somewhat less well known outside the field. From
Stone, Deaton inherited an appreciation of the centrality of measurement
and not taking the data for granted. Gorman’s influence is clearly visible
in Deaton’s interest in aggregation and his appreciation of the potential
CThe editors of The Scandinavian Journal of Economics 2016.

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