People in Economics: Princeton Economist Angus Deaton Profiled
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Bibliographic details
- Authors: PETER J WALKER
- Published: March 1, 2018
Overview
- In-depth profile of Nobel Prize winning Princeton economist Angus Deaton, focusing on how he "connects the dots between theory, policy, and people’s lives."
- Published in F&D Magazine; author: PETER J. WALKER; date: March 2018.
- Highlights include Deaton’s Nobel Prize (December 2015), his prominent paper with Anne Case on midlife mortality in the United States, and his broad contributions to consumption, savings, public health, poverty, and development economics.
Key findings from Case and Deaton research on midlife mortality
- Paper title cited: “Rising Morbidity and Mortality in Midlife among White Non-Hispanic Americans in the 21st Century.”
- Main empirical findings:
- Mortality rates for non-Hispanic white men and women ages 45 to 54 increased by half a percent a year from 1999 to 2013, after falling in the previous two decades.
- Drugs, alcohol, and suicide were the main drivers of the rebound in mortality.
- The rise in mortality was more pronounced among those without a college degree.
- Morbidity increased, with significantly more reports of poor physical and mental health.
- By contrast, mortality continued to decline among other US demographic groups and in other advanced economies.
- Causal and contextual insights:
- Prescription painkillers known as opioids—synthetic forms of opium—became more widely available in the late 1990s, around the same time as the increases in mortality and morbidity.
- Economic insecurity may also play a role, especially for poorer middle-aged whites affected by slow growth in US median wages and moves from defined-benefit to defined-contribution pension plans, which transfer financial risk to the employee.
- Case and Deaton caution that failure to bring the epidemic under control could result in a “lost generation.”
- Follow-up work:
- Their 2017 follow-up paper, “Mortality and Morbidity in the 21st Century,” found that the trend continued through 2015.
Contributions to economics and methodology
- Demand and consumption:
- Co-developed the Almost Ideal Demand System with John Muellbauer; described as providing "a more complete and realistic picture of consumer behavior" and noted by the Nobel Committee as remaining "a cornerstone of demand estimation around the world."
- Formulated the Deaton Paradox: the standard representative agent version of the permanent income hypothesis is internally inconsistent because the time-series behavior of average income implies that temporary changes in income should lead to larger changes in consumption, not smaller ones.
- Household surveys and development:
- Instrumental in the evolution of the Living Standards Measurement Study at the World Bank and in pioneering methods to use and interpret household surveys to describe consumption, analyze birth cohorts, and estimate local market prices.
- Poverty and nutrition:
- With Shankar Subramanian, showed that an adequate diet cost just 5 percent of a day’s wages in their India-based research, concluding that malnutrition is a consequence, rather than a cause, of poverty.
Views on foreign aid, globalization, and policy implications
- From The Great Escape: Health, Wealth, and the Origins of Inequality (2013):
- Argues that foreign aid can be harmful because it makes recipient governments more accountable to foreign donors than to their own people, eroding the social contract and reducing incentives to strengthen institutions and undertake reforms.
- States: “The argument that we have to do something because these people are so poor seems like a very powerful argument, even though it is not.”
- Frames the last 70 years as showing remarkable reductions in poverty and improvements in health worldwide and contends globalization was central to these advances.
- Rejects the notion that globalization is the problem; identifies culprits as "winners who pull up the ladders behind them"—yielding poor public policies that breed corporate rent seeking, inadequate health care, and stagnant wages.
- Policy trade-offs and debate:
- Acknowledges the contentious nature of his critique; opponents note tangible benefits of aid (nurses, teachers, vaccinations, avoided deaths) versus the "rather vague and not very well evidenced claim of long-term institutional damage."
- Emphasizes the need to avoid harming recipients when designing interventions: "The one thing you do not want to do is hurt them, but that is exactly what is happening now."
Career milestones and biography relevant to policy and research impact
- Early life and education:
- Born a few days after the Second World War ended; grew up in 1950s Edinburgh.
- Scholarship to Fettes College at age 13 as one of two boys from underprivileged backgrounds admitted that year.
- Admitted to the University of Cambridge, graduated in 1967; brief stint at the Bank of England; returned to Cambridge for a PhD.
- Professional appointments and honors:
- Professor of econometrics at the University of Bristol in 1975.
- Sabbatical at Princeton in 1979–80; permanent move to Princeton in 1983.
- Worked at the World Bank on the Living Standards Measurement Study during the summer after the Princeton sabbatical.
- Nobel Prize in economics awarded in December 2015.
- Knighted in December 2016, becoming Professor Sir Angus Deaton.
- Personal and collaborative details:
- Married to Anne Case in 1997; they work in adjacent offices at Princeton and have collaborated on influential research.
- Personal interests include fly-fishing, cooking, and travel.
People in Economics: Princeton Economist Angus Deaton Profiled, F&D Magazine, March 2018.
Content in this bundle
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