Nobel Economics Laureate offers a crucial lesson for Thailand
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In his analysis of the interplay between income and consumption among the underprivileged, Economics Nobel Prize winner Angus Deaton has shown that we should be measuring individual income, not aggregate income. This would more accurately determine indivi
Individual income can better reflect consumption because it also measures differences in the transitory and uncertain income received by farmers, informal labourers and homeless and migrant workers.
By focusing more on individual households in this way, we can avoid the pitfalls of using aggregate-income data, which tends to produce blanket measures and poorly targeted budgets that are ineffective in reducing poverty or promoting welfare.
Deaton’s work should encourage us to rethink our policies, whose ineffectiveness is reflected in the fact that last year Thailand was ranked the sixth-least equal nation in the world in terms of income.
Sutipunt Bongsununt
