According to an academy statement, Deaton, 69, was awarded “for his analysis of consumption, poverty, and welfare”, Xinhua news agency reported.
“More than anyone else, Angus Deaton has enhanced the understanding of individual consumption choices which is crucial to design economic policy that promotes welfare and reduces poverty,” it said.
By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics, the statement added.
Answering questions at the press conference after the announcement, Deaton said he was “surprised and delighted” to win the prize.
Deaton was born in Edinburgh and received his PhD at Cambridge University.
Last year, the award – which is officially known as the Sveriges Riksbank Prize in memory of Alfred Nobel – went to French economist Jean Tirole for his pioneering work on the regulation of large companies.
This prize has been awarded every year since 1969.