Angus Stewart Deaton is a
British-American economist who was awarded the Nobel
Memorial Prize in Economic Sciences in 2015 for
his analysis of consumption, poverty, and welfare.
A cursory
look over his career reveals that his studies about the consumption of goods
and services by the people would account for the largest part of his contribution
to economics
Deaton has proposed many economic theories on social
welfare, consumption and development which lay the structure of his model of
Welfare Economics.
In India, he discovered that higher income level lead
to a high calorie intake by the poor thereby proving that low income was the
cause of malnutrition rather than the other way round. He also showed that income inequality was not
linked with higher mortality rates as was believed, in the United States. Also, with the
help of a Gallup survey, he attempted to find out that whether more money buys
more happiness or not, coming on to the conclusion that the salary of $75000 is
the magic income for happiness.
Apart from all these, his most popular award-winning theory
is the Theory of Economic Development.
Background of the Theory
· He carefully studied the correlation between income
inequality and health in both the poor as well as the rich nations.
· He further reviewed the effect of income inequality on the
rate of decline of mortality both on the geographical as well as the individual
front.
· He believed that much of the literature should be given a sceptic treatment due to the lack of quality data available on income
inequality.
Finest Intricacies of the Theory
· Deaton proposed the use of a wider range of mechanisms
such as non linear income effects, restrictions on easy credit, nutritional
traps, public goods provision and relative deprivation.
· He also stated in his theory that some factors that are
closely linked to broader notions of inequality and unfairness give rise to some
of the raw correlations of Income inequality that certainly have no basis
amongst them.
· Furthermore, he added that the fact that income inequality
in itself is not a health risk, does not undermine the importance of health of
other inequalities nor of the social set-up.
Relevance of the Theory in Present Scenario
· The biggest question that this theory poses today is
whether the mechanism of redistributing the income can improve population
health does not depend on a direct link between income equality and health.
· Moreover, there is much debate about the effectiveness of
foreign aid and what kind of project can endanger economic development.
· Also, there is much scepticism about the capability of
econometric analysis to resolve these issues.
Conclusion
· Deaton finally concluded that there is no direct link
between ill health and income inequalities.
· People are less likely to die if they start to live in
more unequal places.
No comments:
Post a Comment