Agencies
Stockholm
British-born economist Angus Deaton won the 2015 economics Nobel Prize for "his analysis of consumption, poverty and welfare", the Royal Swedish Academy of Sciences said on Monday.
The academy said that Deaton's work had been a major influence on policy making, helping for example to determine which social groups are affected by an increase of value-added tax on food.
"To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices," the award-giving body said on announcing the 8 million Swedish crown ($978,000) prize.
"More than anyone else, Angus Deaton has enhanced this understanding," it said.
Deaton also spearheaded the use of household survey data in developing countries, especially data on consumption, to measure living standards and poverty, the academy said.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel's 1895 will.
Deaton, who was born in Edinburgh and holds both British and U.S. citizenship, is professor of Economics and International Affairs at Princeton University in the United States.
IMPACT OF TAX CHANGES
In one key work, "The Great Escape; Health, Wealth and the Origins of Inequality", Deaton describes the huge increase in global prosperity in the past two centuries, underpinned by medical and technological advances, but also looks in depth at the inequalities to which that progress has given rise.
Deaton developed a system for estimating how the demand for each good depends on the prices of all goods and on individual incomes, now a standard tool for researchers and in practical policy evaluation the academy said.
"Assume the government wants to change a tax like the VAT on food or gasoline or something, or to change income taxes. How will that affect demand for different commodities? How will that affect welfare for different groups in society?," Mats Persson, a member of the prize awarding committee, told Reuters.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel's 1895 will.
Deaton, who was born in Edinburgh and holds both British and U.S. citizenship, is professor of Economics and International Affairs at Princeton University in the United States.
