Academic Angus Deaton has won the Nobel memorial prize in economics for ''his analysis of consumption, poverty and welfare''.
The 69-year-old, who was born in Edinburgh in 1945, now works at Princeton University in the US.
Prof Deaton said he found out about the award in an early-morning phone call from the Nobel committee.
"If you're my age, and you've been working for a long time, you know this is a possibility," he said.
"But you also know there are a huge number of people out there who deserve this. That lightning would strike me seemed like a very small probability event. It was sort of like, 'Oh my goodness, it's really happening'."
The Royal Swedish Academy of Sciences said the work for which Prof Deaton is being honoured revolves around three central questions: how do consumers distribute their spending among different goods; how much of society's income is spent and how much is saved; and how do we best measure and analyse welfare and poverty?
In a press conference following the announcement, he described himself as "someone who's concerned with the poor of the world and how people behave, and what gives them a good life".
Last year, French economist Jean Tirole won the eight million Swedish kronor (£637,000) award for his research on market power and regulation.
The economics award is not a Nobel Prize in the same sense as the others, which were created by Swedish industrialist Alfred Nobel in 1895. Sweden's central bank added the economics prize in 1968 as a memorial to Nobel.
The announcement concludes this year's presentations of winners, with the awards to be handed out on December 10 during ceremonies in Stockholm and Oslo.
Alan Alexander, general secretary of the Royal Society of Edinburgh (RSE), congratulated Prof Deaton on the award.
"Deaton's work, which focuses on poverty reduction and increased health and wellbeing, has been highly influential and the RSE is honoured to have him in its fellowship," he said.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here