Understanding the Economics of the World's Poor

[Jenn! 918]

It's a commonly held belief that one of the biggest challenges faced by the world's poorest populations is hunger. But according to Massachusetts Institute of Technology economist Abhijit Banerjee, the economics of poverty are often much more nuanced.

Banerjee is co-author of the book Poor Economics, which addresses the pitfalls of current aid programs and advocates for a radical new approach to thinking about poverty.

"Many of our programs are designed as if it doesn't matter what the recipients think of what we, as the munificent donors, are about to bestow on them," Banerjee tells NPR's Steve Inskeep.

Motivated by the idea that the poor are starving, development policy often focuses on providing food, Banerjee says. But he argues that while nutrition is important, it's not necessarily a poor person's only priority.

"The evidence is that the poor don't act as if they're starving," he says. "They seem to be willing to trade off a little less food for an opportunity to buy a television."

And that trade-off means that, contrary to popular belief, the poor aren't necessarily going hungry.

"We are assuming that they're going hungry, because we think that somehow they're poor, so they must be eating too little," he says.

Banerjee's studies have shown that for the poor, improving their quality of life is just as important as improving their nutrition.

"When people get slightly richer, they are looking for pleasure as well as nutrition, even at the lowest levels of income," Banerjee explains. "If you give them some extra money, they don't go and buy more nutrition — they buy more tasty foods, like we would. They want to live a life; they don't want to just invest in their future."

Banerjee argues that food policy should work with human behavior, not against it. So if there is a real and established deficit of vitamins in the diets of the poor, you could strategically introduce more micronutrients through, for example, micronutrient-rich candy.

"Make it cheap, make it available in all schools," Banerjee says. "Children love candy, and they'll get lots of nutrients from it."

When it comes to the billions of dollars that the West spends in aid, Banerjee says we shouldn't worry about it going to waste. Instead, we should focus on increasing its impact and making it go further.

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[one...two...tree 2,762]

Micronutrient-rich candy?

How about flat screen TV's that give them their daily supply of vitamin D?

[Zero Sum 305]

Isn't it the case that malnutrition usually begets more malnutrition?

[Obama 2012 1,714]

There's an illusion of being 'poor' in America especially

While there are legitimate 'poor' people, overwhelmingly there are a number of people who live in a dump of a house, but have a nice car, nike shoes, big TVs, etc.. yet they eat like #######.

There's no simple fix really other than maybe more public service announcement on nutrition? Used to see these alot when I Was a kid... Not so much these days it seems.

[one...two...tree 2,762]

There's an illusion of being 'poor' in America especially

While there are legitimate 'poor' people, overwhelmingly there are a number of people who live in a dump of a house, but have a nice car, nike shoes, big TVs, etc.. yet they eat like #######.

There's no simple fix really other than maybe more public service announcement on nutrition? Used to see these alot when I Was a kid... Not so much these days it seems.

Did you grow up poor?

[Obama 2012 1,714]

Did you grow up poor?

Actually I did. I've stated as much before.

Though I was lucky enough to be in a sitaution as to where I was given good meals and not shoved junk food down my throat all of the time. That and I was taught to play outside, excercise, etc.. If I wanted to watch TV, I was told to go play and be a kid.

Health factor isn't about socioeconomic backgrounds really at all at the end of the day. It's about being smart.

[one...two...tree 2,762]

Actually I did. I've stated as much before.

Though I was lucky enough to be in a sitaution as to where I was given good meals and not shoved junk food down my throat all of the time. That and I was taught to play outside, excercise, etc.. If I wanted to watch TV, I was told to go play and be a kid.

Health factor isn't about socioeconomic backgrounds really at all at the end of the day. It's about being smart.

So you had a TV? How about a car? Did your mom ever buy you McDonald's or some other fast food? How about toys? Did she buy you toys?

[Obama 2012 1,714]

So you had a TV? How about a car? Did your mom ever buy you McDonald's or some other fast food? How about toys? Did she buy you toys?

Had a TV, yes. Wasn't the newest or biggest TV. I got fast food maybe twice a month? Toys.. outside of Christmas, extremely rare. About the most I was ever able to get outside of Christmas was the little toy cars. My mom didn't drive. My grandmother would get us anywhere that wasn't walkable.

[Gary and Alla 3,694]

Understand this.

If you took all the money in the world and divided equally among all the people in the world, within 5 years we would be economically exactly the same as we are now. The only way for a person to imporve their economic situation is to do it themselves. Otherwise they will just be at some other level of government dictated poverty.

[Trumplestiltskin 5,791]

Yeah. Right Gary. The world's poor are just lazy.

What a load of smelly old ####### you come out with.

[one...two...tree 2,762]

Had a TV, yes. Wasn't the newest or biggest TV. I got fast food maybe twice a month? Toys.. outside of Christmas, extremely rare. About the most I was ever able to get outside of Christmas was the little toy cars. My mom didn't drive. My grandmother would get us anywhere that wasn't walkable.

So by your own standards, you weren't really poor. What then is your definition of poor?

Understand this.

If you took all the money in the world and divided equally among all the people in the world, within 5 years we would be economically exactly the same as we are now. The only way for a person to imporve their economic situation is to do it themselves. Otherwise they will just be at some other level of government dictated poverty.

So you're saying that you're not a billionaire by choice?

[Vi-Jay 218]

Understand this.

If you took all the money in the world and divided equally among all the people in the world, within 5 years we would be economically exactly the same as we are now. The only way for a person to imporve their economic situation is to do it themselves. Otherwise they will just be at some other level of government dictated poverty.

You get close sometimes but, you just seem to keep missing the target.

Nice try though. You get a star for effort.

[Obama 2012 1,714]

So by your own standards, you weren't really poor. What then is your definition of poor?

Poor in America, is a lot different than being poor in other parts of the world.

Most 'poor' people on food stamps, etc. have a roof over their head, a car, multiple TVs, etc..

It's not like they are in a shack with no electricity, scarpping for food and praying to god for change.

There are homeless people in this country yes, don't get me wrong. However when we're talking about the average 'poor' person, they have it pretty good in comparison to other places in the world.

[Zero Sum 305]

Poor in America, is a lot different than being poor in other parts of the world.

Most 'poor' people on food stamps, etc. have a roof over their head, a car, multiple TVs, etc..

It's not like they are in a shack with no electricity, scarpping for food and praying to god for change.

There are homeless people in this country yes, don't get me wrong. However when we're talking about the average 'poor' person, they have it pretty good in comparison to other places in the world.

Well stated, Paul. That should put certain things into perspective if you think about it really hard.

[one...two...tree 2,762]

Poor in America, is a lot different than being poor in other parts of the world.

Most 'poor' people on food stamps, etc. have a roof over their head, a car, multiple TVs, etc..

It's not like they are in a shack with no electricity, scarpping for food and praying to god for change.

There are homeless people in this country yes, don't get me wrong. However when we're talking about the average 'poor' person, they have it pretty good in comparison to other places in the world.

So why do you feel the label 'poor' fits you as a child? Did you live on government assistance? Section 8? Food Stamps? Medicare or some other government funded healthcare? Free school lunch program?