Feb 12, 2016
Today on Trend Following Radio Michael Covel interviews Angus
Deaton. Angus is a British American economist. In 2015 he was
awarded the Nobel Memorial Prize for his work in economic sciences
on his analysis on consumption, poverty and welfare. Those topics
go into one of the most hotly discussed issues in America right
now, inequality. He brings some great data driven insights and
angles to the discussion.
Michael starts the podcast off discussing the benefits of winning a
Nobel Prize and how it opens up debate and reshapes topics. Angus
agrees that the Nobel Prize does get conversations going and as an
academic, it allows him able to reach a broader audience. Michael
and Angus move right into discussing inequality. Angus says that in
periods where there has been the most innovation, this is typically
when there is the most inequality. Angus also quotes a famed
economist saying, “Data is like meatballs. I won’t eat them when
I’m out because I don’t know what is in them and I won’t eat them
when I’m home because I do know what is in them.” When going
through data from places like India, where about 1/3 of all global
poverty resides, it is hard to tell whether the data is correct.
For example, although there is a rapid rate of growth, the poverty
level has not raised. Are poverty levels not moving because the aid
money is going straight to the 1% or is it because the data is not
correct? Angus says the data is easily skewed so it is hard to
really get a read on what is going on.
Next, Michael and Angus discuss how arbitrary the idea of “the
poverty line” is. It is hard to classify what poverty truly is.
Angus likes to look at the subject as if everybody is poor, but
some are just much poorer than others. Measuring poverty across
time and place is an impossible thing to do. Poverty data can be
skewed by various factors such as if the area being studied has
government healthcare or public school systems. Michael brings up
the emotional side of poverty next. Angus says that it is very
possible to be happy and sad at the same time. Emotion isn’t cut
and dry. He has found that not having enough money does have a
large impact on your happiness. However, most day-to-day emotional
happiness comes from having contact with other people and friends,
not money. Money starts to affect your day-to-day interactions if
you are so poor that you are not able to do certain things that
allow you to spend time with friends and family.
In this episode of Trend Following Radio: