A British-born Princeton professor, Angus Deaton, has won the Nobel prize in economics for his work charting global developments in health, wellbeing and inequality.

The Nobel Committee said the economist’s work had a major influence, particularly in public policy where it has helped governments determine how different social groups react to specific tax changes.

“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” the Royal Swedish Academy of Sciences said, announcing the 8m Swedish krona (£637,165) prize.



“By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics.”

His work complements studies by Thomas Piketty and Sir Tony Atkinson, who was also in the running for the prize, that focus on wealth and income inequality, by examining patterns of consumer spending to illustrate growing inequality in health and wellbeing.

He is perhaps best known for the Deaton Paradox – that sharp shocks to income do not appear to cause equally large shocks to consumption.

In his most recent book, The Great Escape: Health, Wealth and the Origins of Inequality, Deaton argues that analysis of economic data shows that while most people in the world have gained in terms of health and wellbeing from higher national incomes, there are many groups that have missed out.

This global view is reflected in his latest research, which he says “focuses on the determinants of health in rich and poor countries, as well as on the measurement of poverty in India and around the world”.



In a recent interview he criticised the trend for the world’s richest people to divorce themselves from government control by living inside gated communities and buying their own healthcare and police protection.

“We should not be concerned with others’ good fortune if it brings no harm to us. The mistake is to apply the principle to only one dimension of wellbeing – money – and ignore other dimensions, such as the ability to participate in a democratic society, to be well educated, to be healthy and not to be the victim of others’ search for enrichment,” he said.

Jean Dreze, an economist based in India who has worked with Deaton, said: “Angus Deaton is not only a brilliant economist but also a formidable scholar and a great writer. He has shown how intelligent use of survey data can illuminate momentous issues of human welfare and contribute to public reasoning.”

Measuring poverty is often based on snapshot surveys of income levels, but Deaton is lauded for a more sophisticated analysis, dating back to 1980, tracking groups or cohorts of the population and examining the improvements, or lack of them, in their wellbeing through their consumption of health services and their life expectancy and access to education.

Deaton, 69, was born in Edinburgh and educated at the same private school as former prime minister Tony Blair, Fettes College. He went to Cambridge where he gained a PhD and later taught, before moving first to the University of Bristol and then to the outskirts of New York and taking dual citizenship.

He is currently the Dwight D Eisenhower professor of economics and international affairs at the Woodrow Wilson School of Public and International Affairs at Princeton.

The economics prize was created by the Swedish central bank in Alfred Nobel’s memory in 1968. The other five awards were established by Nobel in his will in 1895.