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In the footsteps of «The Great Escape» by A. Deaton

русская версия

Опубликовано на портале: 13-07-2016
TERRA ECONOMICUS. 2016.  Т. 14. № 2. С. 26-47. 
Тематический раздел:
The article is devoted to developing countries trying to escape from the world of poverty and misery, which began after the Second World War. In the work «The Great Escape: Health, Wealth, and the Origins of Inequality» (2013) A. Deaton notes that over the past 250 years, mankind has made great strides in the development of public health and welfare of people. Although it did not reduced, and often widened the gap between developed and developing countries, the latter, according to Deaton, have all chances to break the cycle of disease and poverty. Anyway, two largest countries – China and India made the great strides and achieved real progress on this path. Not all countries have managed to achieve such significant success. However, their progress depends primarily on their own efforts. Therefore, the author believes that it is not financial aid to poor countries which guarantees success, but elimination of customs obstacles, entry/residencepermits for migrant workers, and creation of tropical medicines, which do not bring back high profit to pharmaceutical companies. The problem of income inequality and consumption is one of the main focuses for the Nobel laureate in economics in 2015 A. Deaton. In his monographs «Understanding Consumption» (1992) and «The Analysis of Household Surveys: A Microeconometric Approach to Development Policy» (1997), A. Deaton examines the relationship between the total expenditure of economic agents and the nutritional value of foods consumed, to evaluate how effectively the poor, the rich and the middle class spend their budgets in order to cover their need for calories necessary for life. In Deaton’s work «Data and Dogma: The Great Indian Poverty Debate» (2005) the author emphasizes the importance of independent statistical research for a sober assessment of the success of economic reforms in the country – in particular, measures to combat poverty. In India, where the number of poor is in the hundreds of millions, the government isexcessively optimistic suggesting in its official reports that the authorities effectively solve this problem. A. Deaton became famous in 2010 thanks to his study conducted in cooperation with the American psychologist Daniel Kahneman, «High Income Improves Evaluation of Live but Not Emotional Well-Being» (2010). Scientists have wondered,«How much people need for happiness?». Having interviewed 450 thousand Americans, they received a very interesting result: for a man to safelyendure various kinds of life troubles, at least $75 000 a year is a sufficient level of earnings. If the income level is lower, then the troubles are perceived more emotionally. However, with further increase of welfare, level of satisfaction with life does not change. Big money do not add happiness.
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