On Deaton and development: consumption, poverty and well-being

By Marcelo Neri, Director of FGV Social, Professor at EPGE-Fundação Getulio Vargas, Former Brazilian Minister of Strategic Affairs, Executive Secretary of the CDES Council for Economic and  Social Development and President of Ipea Institute for Applied Economic Research

The Royal Sweden Academy of Sciences titled Angus Deaton’s Nobel prize “Consumption, Poverty and Welfare.” The evaluation commission organised Deaton’s scientific contributions during the last 40 years under three headings: i) demand models for groups of consumption expenditures, such as food, housing, etc., that already had earned  his mentor, Sir Richard Stone (1913-1991), a Nobel in 1984; ii) the study of the choice between consumption and saving, which was the object of the prizes awarded to Franco Modigliani (1918-2003) in 1985 and Milton Friedman (1912-2006) in 1976; and iii) studies about “poverty” and “welfare” that already had conferred Amartya Sen with a Nobel in 1998. I would include a fourth element of Deaton’s work, not cited by the commission, on “subjective indicators and well-being” for which Daniel Kahneman earned a Nobel in 2002.

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