Angus Deaton
Citation: For his analysis of consumption, poverty, and welfare.
The key idea
Use micro-level household survey data to measure consumption, poverty, and welfare. Aggregate statistics hide individual variation that matters for policy.
The explanation
Deaton (with John Muellbauer) developed the Almost Ideal Demand System for measuring consumer responses. His work on household surveys, price indices, and poverty measurement reshaped development economics. He has been a vocal critic of large-N regressions in cross-country growth empirics, arguing the data is too noisy.
Why Africa should care
Every African household survey (Kenya KIHBS, Uganda UNHS, South Africa LCS) uses methodology Deaton helped develop. Poverty measurement in Africa — the $2.15/day line, multidimensional poverty — relies on his price-index and welfare-measurement work. His skepticism of cross-country regressions cautions against simple 'aid causes growth' or 'institutions cause growth' headlines.
How to use it
Whenever an aggregate statistic surprises (rapid GDP growth without poverty reduction), drill into the household-survey microdata. Aggregate hides distribution; distribution drives politics.
Canonical works
- Angus Deaton (1997) "The Analysis of Household Surveys: A Microeconometric Approach to Development Policy" Johns Hopkins University Press
- Angus Deaton (2013) "The Great Escape: Health, Wealth, and the Origins of Inequality" Princeton University Press
More from Search, experiments, and climate · 2010-2019
- 2010Peter Diamond, Dale Mortensen, and Christopher Pissarides
Labour markets don't clear instantly. Workers and firms search; matches form slowly. Equilibrium involves simultaneous unemployment and vacancies. The Beveridge curve traces the relationship.
- 2011Thomas Sargent and Christopher Sims
Sargent: rational-expectations equilibrium estimation gives us a way to recover structural parameters from data. Sims: vector autoregressions and impulse-response functions reveal causal patterns in macroeconomic data without imposing strong theoretical priors.
- 2012Alvin Roth and Lloyd Shapley
Shapley: stable matching in two-sided markets (deferred-acceptance algorithm). Roth: take the theory to the field — kidney exchange, school choice, medical residency.
- 2013Eugene Fama, Lars Peter Hansen, and Robert Shiller
Fama: efficient markets — prices reflect all available information; predicting short-term returns is essentially impossible. Shiller: prices are too volatile to be explained by fundamentals alone; behavioural and bubble-prone. Hansen: GMM — the workhorse estimator for testing asset-pricing models.
- 2014Jean Tirole
Industrial organisation needs game theory + information economics. Optimal regulation of natural monopolies requires accounting for information asymmetries between regulator and firm. Two-sided platforms (credit cards, OS) have specific competitive dynamics.