Princeton economist wins Nobel for work on poverty

The Princeton University economist's research has raised doubts about sweeping solutions to poverty and about the effectiveness of aid programs.

For work that the award committee said has had "immense importance for human welfare, not least in poor countries," Deaton, 69, will receive a prize of 8 million Swedish kronor (about $975,000) from the Royal Swedish Academy of Sciences.

Deaton's research has "shown other researchers and international organizations like the World Bank how to go about understanding poverty at the very basic level," said Torsten Persson, secretary of the award committee.

Deaton created tools that let governments in poor countries study how families adjust spending in response to, say, an increase in the sales tax on food.

Deaton has done "very careful, detailed work" on data about poverty at the household level in poor countries "so that one could understand the effects of changes in policies on how people behave," Rodrik said.

Deaton discovered that India had far more poor people in rural areas than previously thought, a finding that led the government to expand subsidies.

Among other things, he studied how much households spent on "adult" items, such as beer and cigarettes, to see whether families consumed things differently depending on the sex of newborn children.

Another Deaton study challenged the once-popular notion that malnutrition caused poverty by making people too weak to find work.

[...] last year Deaton wrote that he worried that high-paying jobs in finance and other fields were diverting talented young people from "more worthwhile pursuits."