Nobel Memorial Prize in Economics

British economist Angus Deaton wins the 2015 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his works on consumption patterns in societies and extrapolating that to measure poverty, notably in India.

One doesn’t have to be a trained economist, mathematical genius or an expert financial analyst to notice that in spite of increasing gross national as well as per capita income levels, a significant fraction of India is still poverty-stricken. It puzzled economists and financial reformers for a long time. Thanks to the tremendous efforts and research at various levels of economy by British economist Angus Deaton, we now know the scientific reason behind that.

From time immemorial, standard parameters for assessing the economic status and growth of any society had been income at individual as well as social level. Contrary to the conventional beliefs, Deaton analyzed selected cohorts for their consumerist patterns and individual consumption habits to delve deep into the intricacies of economic growth or its lack in any society. Being a social platform with people thriving at varied economic tiers as well as of extreme diversities in socio-cultural behavior and with its fast growing economy, India served as the best practical laboratory for him. Studying Indian economic patterns over decades in selected cohorts, he formulated the exact parameters based on individual and collective consumption to measure economic status of any society.

His observations became all the more significant when he rejected the recommendations of the panel headed by C Rangarajan, the former Reserve Bank Governor on alleviating poverty in India. He defended himself with reformative recommendations based on his observations of Indian economy. He suggested to completely delinking existing economic stratifications, including APL-BPL grouping, to reform policies.  Indian government and its formal financial advisors are still working on these complex strategies for effective alleviation of poverty in India.

Though his work was mainly based on Indian scenario, it has global applicability irrespective of the country being rich or poor. Any growing economy is currently evaluated based on the criteria put forth by him. This gives a more sensible and clear understanding of economic dynamicity worldwide. This contribution was honored by the Royal Swedish Academy of Sciences yesterday with the 2015 Nobel Memorial Prize for Economics at Stockholm, Sweden. Born in Scotland, Angus Deaton is currently an academician at Princeton University. His present work is on reforming the parameters and indices to measure health in various societies.

With this we come to the official end of this year’s Nobel “season”. RGCB Blog admires and acknowledges the works of excellence of all the eminent awardees and their perseverant teams.