The great escape from poverty: newly minted economics Nobel laureate Angus Deaton worries crony capitalism will kill off economic growth.

• Author: Bailey, Ronald
• Position: Columns

THE PRINCETON economist Angus Deaton is singularly devoted to facts and close measurement. The latest winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, Deaton is a fierce empiricist who deploys data to slay gauzy theoretical speculations on the sources of economic growth, poverty, and inequality. His work focuses on what counts as economic growth, whether money actually makes people happy, and how development aid has failed to help poor countries.

One of Deaton's studies involves the ratio between men and women, which is skewed unnaturally toward men in many poor countries. One popular theory in the 1980s was that tradition-minded families allocated more resources, chiefly food, to sons than to daughters. Deaton tested this hypothesis with data from careful surveys of how consumption changed after the birth of children in families in the Ivory Coast and Thailand. The results: There were no significant differences in how resources were distributed between boys and girls. Thus, the anomalous sex ratio in many poor countries had to be the result of other dynamics, such as sex-selective abortions and the use of contraception once the desired number of sons was born.

More recently, Deaton has been trying to figure out why the amount of calories consumed by people in India has apparently been declining over the past 25 years even though their incomes have been increasing. Deaton suggests that Indians may be eating less because they are healthier and engaged in less strenuous physical labor. Yet undernutrition figures for the subcontinent remain among the highest in the world--50 percent of children are underweight for their ages, for example. The mystery remains unsolved.

With regard to well-being, Deaton has challenged the "Easterlin paradox"--the notion that after a certain level of income, more money can't buy happiness. In 1974, the economist Richard Easterlin argued that increasing average income did not raise average well-being. Among other evidence, Easterlin cited survey data that showed that Americans in the 1970s were no happier than Americans in the 1940s, even though their incomes had basically doubled since then.

Deaton compared data that measure day-today emotional well-being versus long-term life satisfaction. The former does appear to top out at around $75,000 per year in the United States. But there is no income satiation point using an II-point life evaluation scale in which 0 represents a...