The biggest thing I took away from this class is that, in regard to climate change and the dangers associated with it, there are more reasons to have hope than fear. Each environmental issue we covered this semester can be conceptualized using an economic model or tool. With this in mind, we—and by “we” I mean us as individuals, the United States, and every person and country around the world—can formulate solutions. Additionally, I learned that these solutions aren’t nearly as dramatic as they’re often made out to be. From carbon pricing to abatement costs, these tools are available for use. But, in the words of G.I. Joe, “knowing is half the battle.” All it will take is for policy makers and individuals to step up and use these tools to change the path we’re headed down. I will also always remember the phrase “mutually agree to mutually coerce.” It will take a collective effort, but the changes deemed necessary are not anything we can’t handle.

John Oliver’s piece, in addition to the other two opinion pieces, all lead back to the three I’s we have discussed this semester. Each piece touched upon the “controversies” surrounding the Green New Deal. Evidently, influential news anchors and specific policy makers are stuck in their own ideologies. They believe climate change is not all that problematic and think that some—if not all—changes are unnecessary. John Oliver’s rhetoric stresses how absurd it is for these people to be making these assumptions. The ending of the piece—or Billy Nye’s somewhat explicit demonstration of what will happen if no changes are made—might be exaggerated, but I think points to a very key idea: people need to “wake up” and take the science to heart. Something in the Federalist piece that I found to be absurd was the comment that the Green New Deal would present “unfathomable societal costs.” My question to that is, what about the costs to society if no change is made? Is the author even aware of those? The proposals in the Green New Deal ensure that its goal to net-zero greenhouse gas emissions would be “a fair and just transition for all communities and workers.” Not to mention, it would bring millions of new jobs. The actions proposed by the Green New Deal are not all that extreme. In fact, they’re justified in comparison to the costs to society if no change is made.

Kasakove thoroughly details the inequalities faced by those in poverty during this pandemic. The quote from Gina McCarthy—President of the National Resources Defense Council—explains the multifaceted issue simply: “is not just a public health issue. It’s directly related to social equity and environmental justice challenges.” After learning about the disproportionate incidence of coronavirus among those in poverty and of color, I was curious about my own state. Metropolitan Detroit has seen an immense amount of coronavirus cases in comparison to the rest of the nation. My own county having over 4,000 cases and over 200 deaths. Wayne county, where the city is located, has over 3,500 cases and about 180 deaths. What I found is that coronavirus has disproportionately affected blacks in Michigan. “African Americans make up 13.6% of the state’s residents but more than 40% of the more than 500 people have died as of Monday, according to the Michigan Department of Health and Human Services.” Further, they even expect the number to be higher considering 28% of the fatalities have no racial data. While whites make up 75% of the state’s population, they have made up 28% of deaths. Detroit—whose population is 80% black- has a higher mortality rate than New York City. A cause of this issue is speculated to be the city’s water supply (and if you know the history of the Flint water crisis, this is no surprise). The city had shut off water to thousands of households because of delinquent bills over the last two years. As we know, handwashing is one of the biggest preventative measures we have against this virus, but for households that didn’t have running water, this wasn’t possible. City officials turned the water back on March 9th, but over 2,500 households still didn’t have running water for two more weeks. Although not environmentally related, Detroit and other poor parts of Michigan are facing many of the same issues mentioned in this Vice article. Social inequalities are only heightened in the face of a crisis like this one, making change the only necessary option. The following link (https://www.oakgov.com/covid/dashboard.html) gives a detailed dashboard of coronavirus cases in my county. It breaks it down by race, gender, age, and more. It even includes a map by area code. More black people have died in my county than any other race, though 50% of races are unaccounted for. Here (https://www.metrotimes.com/detroit/coronavirus-exposes-deadly-impact-of-poverty-racial-disparities-in-metro-detroit/Content?oid=24281035) is the article describing the disproportionate coronavirus incidence.

After reading this article I wondered not only what the long-term impacts of the EPA easing pollution enforcement will be, but what exactly this means for the manufacturing sector, including the general impact coronavirus has (and will have) on the manufacturing sector. Before the outbreak, there were a lot of emissions from power companies and manufacturers. What I’m curious to know now, with a massive halt on production in almost every industry, is if emissions directly from the manufacturing sector have decreased. With this in mind we must also ask the question about manufacturers—such as General Motors and Ford—who have switched over to producing ventilators after Trump invoked the Defense Protection Act. I was unable to find anything regarding how the environmental impact of producing ventilators, only that they are extremely costly and require very skillful programming (as they rely on software more than hardware, which is very different than car manufacturing). It’s extremely confusing that while emissions from manufacturing ventilators have the potential to be detrimental to the nation’s overall respiratory health, these devices serve as the primary method to keep a person breathing. With the high costs these companies will most likely face in producing these live-saving medical devices, does it make sense to lessen the costs of emissions? And what if the emissions from producing ventilators are less than that of normal production (as we can only hope)? Further, it’s important to examine the role of power companies—also responsible for a significant amount of air pollution—at a time like this. One could argue our dependence on electricity is greater than ever, so I could see why the EPA might resort to these measures to ensure power companies stay up-and-running (despite what we know might happen down the road). I agree with my classmates that it is a simple MPC/MSC model, but in my case I think the marginal social cost might not be as far up as it is during normal times (because of changes in the manufacturing sector), but there is no way to know for sure right now. Sources: https://www.cnbc.com/2020/04/01/coronavirus-update-us-manufacturers-answer-gms-call-for-ventilator-parts.html https://www.wired.co.uk/article/car-manufacturers-ventilators

All three papers circle around the conceptual framework of human capital theory. Investments in human health directly contribute to overall economic productivity. This idea was stressed multiple times both in my development economics class last semester, as well as my current health economics in developing countries class this term. That air pollution causes extreme detriments to physical and cognitive health is no surprise, but it is still extremely concerning. As a chronic seasonal allergy sufferer myself, I was intrigued by the effects of air pollutants—in addition to increases in global temperatures—on the growing amount of pollen each year. A study that examined the effects of temperature increases on pollen production found that future pollen seasons will grow in length anywhere from 3-22 days (https://rmets.onlinelibrary.wiley.com/doi/abs/10.1002/joc.820). This wide range is appropriately alarming, but demonstrates another way in which climate change will increase adverse health outcomes. Today we are seeing the effects of detriments to health on human capital and cumulative economic productivity. Schools, offices, sports are all being halted in an effort to restore global health and slow increasing rates of the spreading pandemic. These papers and this global crisis all point to the importance of health and welfare as the primary factors of production.

“Full cost accounting for the life cycle of coal” thoroughly analyzes the negative externalities associated with the extraction, transport, processing, and combustion of coal. The paper examines the full cost of its life cycle, concluding that these costs immensely outweigh the benefits. I appreciate the extensive use of detail in this paper to show how the costs of this commodity affect every aspect of human and environmental welfare. The long-term effects of coal mining pave a terrifying future both globally and in the Appalachia region. I was particularly concerned in regard to the danger coal creates for Appalachia’s biodiversity, “second only to the tropics.” Last semester I took Professor Marsh’s introduction to ecology class. We specifically focused on the region’s salamander populations. Before taking the class I had no idea that southern Appalachia is renown for its diverse selection of salamander species. During the class we discussed the ongoing decline of certain salamander species. For instance, the Peaks of Otter salamander and the Big Levels salamander are now restricted to specific mountain tops, found nowhere else in the world. Unfortunately both species are listed as “vulnerable” in regard to their conservation status. Because salamanders rely on cooler temperatures, very particular moisture levels, and a forest’s overall biodiversity, climate change and increasing temperatures pose a huge risk to their existence. Salamanders are also extremely important for the rest of a forest’s ecology. So it was very upsetting when this paper briefly mentioned how coal mining poses as a danger to Appalachia’s salamanders, reminding me of the importance of conservation efforts for these salamander populations. The effects of coal use for the production of energy on salamander populations serves as an example of the way negative externalities from fossil fuels are not only inevitable, but endless. As the paper suggested, public policy needs to be changed to help eliminate these immense costs to society and the environment. It’s more than devastating to watch our government continue to subsidize an energy source that does significantly more harm than good.

In June of 2014 I went on a service trip to Orange Walk, Belize. Following our mission work our group leaders surprised us with a one-night trip to Caye Caulker. I vividly remember taking an hour-long water taxi to the island. I refuse to describe the beauty of the water as I could never do it justice. We spent our day there snorkeling. Although it was almost six years ago now, I will never forget the water clarity, as it was so clear one would’ve thought they were looking through air. I remember the nurse sharks and sting rays, the bright oranges and purples. These are the images that ran through my head as I read this paper and thought about my own willingness-to-pay. I found the results of this paper to be appropriate in the context of previous literature. It’s no surprise that often times tourists’ willingness-to-pay is higher when they have visited Belize before. What I’m willing to pay after my experience in Belize is probably significantly higher than someone who has never been. However, I had one main concern in regard to the way the survey was carried out. The interviewers circulated around the islands at bars, restaurants, dive shops, airports, and beach-side resorts. I’m wondering if there could be some bias considering these people were already on—or traveling to—the island regardless. I think it would be beneficial to survey people outside of the island/country (but of the same demographic (e.g. well-educated, higher income)) and capture their WTP.

Krutilla’s “Conservation Reconsidered” provides a critical reflection about the allocation and use of natural resources. He continues the discussion we’ve been having in class about the divergence of private and social costs (specifically in the context of the natural world). Although Krutilla acknowledges the role of advancing technology in helping solve the allocation issue, he claims it will never be able to completely replicate “natural phenomena” in the eye of the consumer. I found his examination of option demand—or a person’s willingness-to-pay for something that has no close substitutes—particularly convincing in regard to use of the natural resources. While he names some markets for preservation—such as the Natural Conservancy and WWF—he stresses that these kinds of markets are few and far between. Additionally, Krutilla extensively deliberates the formation of demand using the idea (from the work of Davidson, Adams, and Seneca) that present and future demand comes from the act of learning-by-doing. That present demand will incorporate itself in the utility of those in the future is—in my opinion—applicable to most things, even the life of a W&L student. Currently our student body has access to many outdoor recreational activities. The legacy of these outdoor recreational activities—one could argue—has been “passed down” through generations. But what if future W&L students could not have access to these activities? Wouldn’t that pose as a risk to the utility of these generations because of the demand established by previous generations? I was also intrigued by Krutilla’s comments about the role of technology. Multiple times he addresses the improbability of technology creating “perfect” substitutes for natural wonders. However I was curious to see, considering this article was published 53 years ago, how far we’ve come in creating any successful “substitutions” for natural phenomena. I was disappointed to find there has not been as much success as I expected. One article I found (https://www.sciencedaily.com/releases/2019/01/190116111011.htm) discussed the advancement of new technologies for artificial photosynthesis. Although technologically successful, the process is still extremely costly and there is a lot room for improvement. Overall, there is still an alarming amount to be done to help minimize the costs of these processes.

Coase’s “The Problem of Social Cost” outlines the issues created out of placing social costs on the entity held responsible. Coase stresses the “reciprocal nature” of what was—and I would argue still is—the most commonly proposed and obvious solution to this problem: requiring monetary payment from the responsible party for the negative externality. He argues this is counterproductive and introduces the importance of a set agreement between both parties for accounting all associated negative externalities. However, his idea that both parties should be able to account for the entire social cost assumes that they will consider all negative externalities beforehand and that there will be no transaction costs. It goes without saying that these assumptions are—as of this moment—unrealistic. In most situations two parties are incapable of predicting all associated costs. With this being said, Coase acknowledges how both parties often do not have access to perfect information and how zero transaction costs are not entirely feasible. Even though his extensive cattle-raiser and farmer example made sense in the context of his argument, my own opinion is that humans are (unfortunately) too flawed and self-interested to achieve the level of agreement Coase uses in this example. It is inevitable that there will be situations in which one party benefits more than the other in an agreement, allowing for some costs to be wrongfully placed. However, these social costs—especially in regard to current environmental problems—need to be resolved in some way, and in a perfect world (or a model) Coase’s theorem makes perfect sense. I want to learn more about how this paper is received and used in the field of environmental research today, and how the use of its ideas has changed (if at all) over the past few decades and look forward to discussing it in class.

The paper prepared for the World Bank by the Potsdam Institute for Climate Impact Research and Climate Analytics, “Turn Down the Heat: Confronting the New Climate Normal,” addresses the severe implications of global warming on the environment and development. The paper focuses on how without action towards eliminating contributors to the problem such as greenhouse gas emissions and coral-reef bleaching, the world will face a 2°C increase in world temperature by mid-century, and a 4°C increase in world temperature by the end of the century. The consequences of this warming are endless, from negative impacts on food and energy systems, water resources, ecosystems, and overall increases in social vulnerability for those living in developing countries. This paper really opened my eyes to the effects of climate change on developing countries. Already at a vulnerable state in regard to food security, substantial housing, and access to water, those living in developing countries cannot afford for the global temperature increase. I believe the dangers posed to these countries needs to be further emphasized when it comes to policy implications and funding towards slowing warming. Moreover, these risks demonstrate just how dependent humans and the earth are, something that is often forgotten by those who make decisions about resource allocation and industry. Something I wanted to further look into from the paper was the bleaching of coral reefs. I was astounded by the magnitude of their decline. It’s almost unbelievable that rates of ocean acidification are the highest they’ve been in 300 million years and rates of sea level rise are the highest for 6,000 years. The effect on fisheries is also shocking as their numbers are expected to significantly decrease within the next 30 years. However, I had recently seen an advertisement for non-profit organization looking towards re-growing coral reefs throughout coastlines in the United States and around the world. I looked up current organizations that are working towards this issue and found the Coral Restoration Foundation (coralrestoration.org). This organization aims to grow and restore coral reefs to health in Florida and globally. Additionally, they have a mission to educate others on the importance of our oceans and further research how we can support them. They have already made quite an impact since 2007: planting over 100,000 endangered staghorn and elkhorn corals back into the Florida Reef Track. Not only have they successfully planted these endangered species, but ignited the growth of thriving new colonies. My only concern from reading the paper is that further warming could be a detriment to the work put in by organizations such as the Coral Restoration Foundation. It seems that if we don’t control for the primary causes of ocean warming and acidification, then there is the risk of destroying these rebuilt coral reefs. With this being said I think it’s important to acknowledge that global institutions need to account for all primary causes of global warming, not just one or a few.

Milovich’s paper—“Does Aid Reduce Poverty”—examines the relationship between aid disbursements and poverty alleviation. Contrary to previous studies that use income as a measure of poverty alleviation, Milovich identifies the importance and effectiveness of using the 10 indicators of the Multidimensional Poverty Index. The paper uses data on countries who received aid in the period 1946-1999 and their corresponding levels of MPI between 2000 and 2014. She ultimately finds that there is a significant relationship between them, and also acknowledges the risk of reverse causality and endogeneity issues between poverty and aid. I was particularly intrigued by the approach through the indictors and not income, considering a lot of papers in the field rely so much on income as a measure. Noticing that this paper was written last fall, and a lot has happened in terms of foreign political relations over the past year, I wondered if there was any recent news about developmental aid. I found that Brexit party leaders have been claiming that “trade and not aid” is the way to further help developing African countries. They believe that the EU creates barriers for African countries to sell produce to England. Nigel Farage also made the claim that they have been the highest spenders on foreign aid. I found this confusing, considering the paper identifies the U.S. as the main donor in the DAC? Overall I found the controversy particularly interesting and question the implications of foreign aid being politicized. Although the paper effectively explained the study and effects of aid on multidimensional poverty, I have questions. How is it the United States came to be the main donor among the Development Assistance Committee? Why has previous literature over the past 50 or so years varied so much in identifying the value of developmental aid? Because results are so varied, what kind of research needs to be done to solidify whether aid helps alleviate poverty?

Eichengreen and Mody’s “Interest Rates in the North and Capital Flows to the South” empirically examines the effects of interest rates on different regions and between fixed- and floating-rate issues. Their research uses regression analysis to look at the magnitude and statistical significance of issue amounts and the U.S. treasury rate. A large part of the paper identifies the different effects in different regions. They explored how higher U.S. treasury rates increases bond issuance in Latin American countries but not as much in East Asian countries. I found the historical “ability” for East Asian countries to “capitalize on favorable market conditions” particularly interesting. Earlier in the semester we discussed the exceptional and significant growth of the East Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan) in the latter half of the twentieth century. We talked a lot about how their growth came from export-led strategies. At the time I did not quite understand the implementation of this strategy. Now, the strategy makes sense under the context that they were making careful moves in regard to foreign relationships (exports and investment). I wonder what exactly prompted their effective methods? We have also covered the struggle of Latin American countries to sustain ignited economic growth. This paper demonstrated the dependability of these countries on U.S. rates. Remembering that they moved towards ineffective liberalization and less of an export-led strategy than those of East Asia, I found it unsurprising that they saw a larger effect from changing U.S. rates. Again, I am curious as to the exact causes of this dependency (?) and wish the paper would’ve gone into more qualitative detail regarding this relationship.

Each reading—while discussing the effects of malaria and AIDS on overall human capital—pays a significant amount of attention to the effects on children. I found this to be quite interesting considering investments in child health and education play a particularly important role in economic development. “The economic and social burden of malaria” explains how malaria has a greater negative effect on children, as they are unable to build immunity against the parasite in comparison to adults. Further, the article addresses the problem of increasing fertility rates as a result of high child mortality rates. This creates high population growth rates, resulting in aggressively high populations of low-income countries. High fertility rates also decrease the investments in education per child. As we know, investments in educations bring high returns in low-income countries where malaria is often present. This phenomenon reflects the circle of endogeneity low-income countries experience that we keep coming back to in class. I think it’s important to acknowledge that if malaria can be completely eradicated through policy intervention, it will help decrease fertility rates, increase investments in child education, and positively influence economic development. “The Impact of AIDS Treatment on Savings and Human Capital Investment in Malawi” similarly acknowledges the influence of health dangers in the lives of children. The econometric results of this paper found increasing investment in child education following the implementation of ART facilities. They found that “reducing the distance by half increases expenditures on children’s education by US$2.5 in (quarterly) spending on education per child during 2004-2010).” This statistic is extremely impressive. Not only does the availability of an AIDS treatment benefit the health of the entire population, it leads to quality investments in the human capital of children. Again, in the context of our class on Tuesday, the returns to investment on education have potential to promote economic growth in low-income countries.

Shultz drives home the importance of population quality and knowledge in his lecture, “The Economics of Being Poor.” He addresses the multiple misconceptions towards land and the agricultural sector within the field of development economics. He argues that urban bias—or the explicit encouragement of institutions towards industrialization—is direct discrimination against agriculture. Further, he stresses the significance of investment in human capital—specifically that of education, health, skill development, and research. Shultz shows the danger in assuming that all forms of capital are homogeneous. I found it particularly interesting how he discusses treating population quality as a ‘scarce resource.’ His argument essentially promotes the well-being and knowledge of both individuals and governments within low income countries for economic growth. Recently, in my Economics of Social Issues class with Professor Goldsmith, we read a piece from the Hamilton Project, “The Future of Work in the Age of the Machine.” This paper discussed the growing importance of skill development, education, and training in the age of quickly advancing technology. I found this relatable to Shultz’s view towards industrialization and investment in human capital. Both pieces emphasize that the efficient way to continued growth is through investment in human capital (skills, education). I think it’s important to acknowledge that investment in human skills and education will only bring positive returns and help workers keep meaningful jobs, no matter the sector they participate in. Further, growth in the urban sector can only last for so long before it experiences diminishing returns. Both pieces offer unique approaches from the commonalities of development economics, but deliver justified arguments in the context of trapped low-income countries.

Duflo insightfully demonstrates the way female empowerment promotes economic development and vice versa. She examines the relationship of promoting female welfare and its resulting positive outcomes and externalities. She thoroughly shows how economic development works towards closing the gender gap. What I find particularly interesting, however, is her claim about economic development not being enough to achieve complete equality between men and women. For example, Duflo explains how new technologies and overall economic development can have “perverse effects” for women if they decrease the “cost of discriminating against girls.” I found this to be a frightening thought, as one wouldn’t expect the development of an economy to have negative impact on an already discriminated group. However, she then justifies how economic development can’t stand alone in improving and equating the lives of women. Duflo furthers her argument using James Wolfensohn’s (former World Bank President) address. The address introduces the logical concept that educating women will have a “catalytic effect on every dimension of development.” In this way, Duflo flips the promotion of development for women empowerment in the other direction. She notably ties the two movements—economic development and women empowerment—into one. Duflo also argues that the long-run benefits of empowering women, even at the cost of men in the short-run, is well worth it. Although this argument is well justified by her paper, I worry how policies can be implemented throughout the world, since male prejudice—unfortunately—doesn’t simply disappear.

Rodrick’s paper stresses that there is no singular approach in finding effective economic development policies. He defends the coordination of the public and private sectors to strike a balance in economic policy. Rodrick emphasizes how each country is unique and requires different strategies for growth. I found this paper both parallels and contrasts Krugman’s “The Fall and Rise of Development Economics.” Assuming that liberalizing, deregulating or privatizing economic policy (the Washington Consensus) will automatically lead to growth, in any country, is similar to assuming that a model is a complete representation of an economic reality. Inevitably (and unfortunately), no economic model or policy can account for constantly changing exogenous variables. More often than not these variables will negatively affect what could’ve been a beneficial policy or a model. For example, Rodrick addresses how the investment climate in Latin America in the 1990s didn’t produce its anticipated growth. Avoiding the meticulous details when implementing policy creates a loss. This idea is also reflected in Krugman’s African map example. In other words, what’s loss in translation—i.e. a policy or a model—matters in some way or another. However, each author claims opposing viewpoints in regard to generalizations. Krugman identifies the dangers of avoiding models because of their assumptions and generalizations. Rodrick does the opposite. He warns against the use of generalizations in finding appropriate economic policies. He encourages a balance of government involvement and market liberalization, rather than generalizing that one is more sufficient than the other.

Krugman provides a thorough reflection on the history of development economics. He carefully meditates on the methods of important development economists—specifically the work of Albert Hirschman, Rosenstein Rodan, Myrdal, Lewis, and others. He ponders the reasons why development economics saw particularly slow momentum until the later-half of the century, hypothesizing that they were too caught up in finding—or avoiding limiting themselves to—appropriate economic models. Krugman specifically warns against Hirschman’s methods, claiming that he rejects the benefits models offer because of his deep sense of intuition and obsession with complexities in a fear that more will be lost than gained. Something exceptionally interesting in the paper is the inevitable ignorance associated with designing a model. Krugman explains how a “loss of knowledge” is necessary in order to understand larger concepts and create more insights. Krugman’s “evolution of ignorance” is valid for being productive in fields of knowledge and understanding. Leaving out the complexities of reality allows for economists to move forward and solidify concepts into a bigger, more comprehensible, picture. Without models and metaphors, it would be extremely difficult to convey most economic ideas. There is currently a strong push to make progress and formulate effective policies in the field of development economics. However, without the ability to move forward and accept the flaws and assumptions of a model, economists will slow progress and allow time for more issues to surface.

The article by Wang, Wong, and Yip addresses the growing gap in GDP per capita between the top percent of advanced countries and bottom percent of poor countries. They elaborate on the differences in growth—or lack thereof—among the Asian Tigers, other fast-growing economies, trapped economies, and lag-behind countries. All measures used in the article are relative to the United States. The data explains how the fastest-growing countries are growing faster than the United States, while trapped economies are growing slower. I wonder about the implications of using the United States as a "standard" for distinguishing the speed and magnitude of growth. It seems this could affect the interpretation of the data in some way? The country-specific analysis explored the circumstances behind each economy. I was astounded by the way most of the economies described were dependent on those of other countries for growth and stimulation, or for an example. Much of this dependency takes the form of international trade, foreign investments and policy. For example, South Korea’s economy saw rapid growth by imitating Japan’s economic model. Further, many of the fastest-growing economies opted for export-led policies, showing the importance of international involvement for economic growth. This dependency also took form in unique ways such as tourism. Both Mauritius and Greece saw benefits in the expansion of their tourism sector, which relies on citizens of foreign countries for success. However, not all international dependencies are positive. Brazil’s foreign debt has created a massive strain on its growth, and Thailand’s hostile international politics has contributed to their economic problems. As a whole, the article drew a clear picture of how dependent these economies are on one another.

Banerjee and Duflo examine the economic lives of the those living on less than two dollars a day among thirteen countries. More specifically, they review their living arrangements, spending, sources of income, education, economic markets and infrastructure. However, in addition to identifying elements of their economic lives, Banerjee and Duflo address the questions that arise from attempting to find solutions to poverty. These questions ask why those in poverty aren’t eating and saving more, investing in their education, and specializing in their work. I found the answers to these questions to be quite effective at explaining how those in poverty have a justifiable rationale for doing so. I found the explanation of spending choices particularly compelling. While I see why there would be a common misconception that those living on less than two dollars a day should spend money solely on food or other basic necessities, it’s quite irrational. When it comes to spending, humans make trade-offs. Often times things other than the basic necessities play more importance in life. Wanting to purchase a radio or a couch—even if it requires sacrificing a meal—makes sense under certain circumstances and is a human tendency. In high school I went on a mission trip to Orange Walk, Belize (near the border of Guatemala). We ran a vacation bible school program and helped begin construction for a local congregation. One night of the trip we went to the homes of members of the congregation for dinner. The owner of the home I visited was a single woman named Sera. Her children, along with her sister and her children, lived with her. The house consisted of two rooms. The six children shared one bed and I remember Sera expressing her excitement about her new TV. What I saw paralleled a lot of what Banerjee and Duflo mention. For instance, Sera not only had a large family, but her family unit consisted of more than just her nuclear family. Further, she had allocated her resources to have us over in celebration that night. Sera’s priorities were based around providing for her family and their happiness, such as buying them a TV. Based on what I witnessed in Belize, I appreciated the way in which Banerjee and Duflo explain the complexity of human tendencies for those living in poverty.