The Nobel prize in economics was awarded for showing the world as it is—not how it should be
The Nobel prize in economics* has been awarded to Angus Deaton, British-born professor of economics and international affairs at Princeton University. The 69-year-old received the award for his research on measuring and understanding consumption, poverty, and welfare, especially in developing countries.
Deaton strives to understand the world as it is, not how economic models suggest it should be. Consumers do not behave the same way in rich and poor countries, and poverty takes on radically different characteristics from country to country.
“When you read that world poverty has fallen below 10% for the first time ever and you want to know how we know—the answer is Deaton’s work on household surveys, data collection and welfare measurement,” writes Alex Tabarrok at Marginal revolution. “I see Deaton’s major contribution as understanding and measuring world poverty.”
Among his wide-ranging research output, Deaton shows that children consume about 30-40% of what adults consume, suggesting per-capita estimates of poverty are overstated in families with children. He also digs into data and surveys to challenge the conventional wisdom that happiness increases with age—that is mainly the case only in rich, English-speaking countries. India is an obsession of his, and in a particularly interesting paper (PDF) he examines the puzzle that Indians’ average calorie intake has fallen as they have grown richer.
Taken together, Deaton’s work addresses the shortcoming in measurement tools, challenging fundamental assumptions about common economic indicators.
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http://qz.com/522163/the-nobel-prize-in-economics-was-awarded-for-showing-the-world-as-it-is-not-how-models-suggest-it-should-be/
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