Justin Wolfers: Why Angus Deaton deserved the economics Nobel | Business Standard Column

Justin Wolfers: Why Angus Deaton deserved the economics Nobel | Business Standard Column


Writing about this year’s economics
Nobel winner Angus Deaton, Justin Wolfers, professor at the University of
Michigen makes the following observation about data:

“…For too long, econometric analysis had
proceeded as if data were simply handed down from a statistician-loving higher
power. The reality is far uglier: Data are imperfect, surveys can be
unrepresentative, people misreport, and attempts to recontact survey
participants often fail. Deaton confronts these issues head-on, and he has
taught economists  how to extract meaning
from imperfect data.”

(Read full article using the link above...)

The quote is relevant not only in the
context of the dilemma faced by planners, social scientists and regulators
equally in understanding poverty and financial inclusion. Even the feedback
given to Prime Minister Modi about the progress made in implementation of
Pradhan Mantri Jan Dhan Yojana need to be viewed again, after going through
this observation by Justin Wolfers. Prime Minister was informed that additional
deposits of Rs 32,000 crore had accrued into newly opened accounts under the
scheme. PM said, “Hum abhee tak ameeron
ke gareebee dekhe hei…Ab hum gareebon ke ameeree dekha…”
(So far we have
seen the poverty of the rich…Now we saw the wealth with the poor…)Without
contesting facts, let us also remember that banks with lakhs of crores of
deposit base, in any case will be opening new accounts and accepting fresh
deposits. This is not to belittle the achievement under the scheme with
provision for zero balance accounts for ensuring financial inclusion, but just
a caution to view data with an analytical mind.

M G Warrier


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