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I thought Banerjee and Duflo’s article, “Economic Lives of the Poor” provided an insightful and thorough description of how the poor live their lives through an economic lens. One finding that particularly caught my attention was that among the 13 countries studied, people on average spent only 56% - 78% of their budget on food. Whenever I initially read this statistic, I was confused as to why the poor weren’t spending more money on a necessity such as food. I then remembered our discussion in class on Tuesday and how humans are much more substantive than simply having food and clothing. In order to live a meaningful life, the people who were included in the study chose to allocate a percentage of their money toward festivals, weddings, and funerals in addition to the basics. In some circumstances, being able to enjoy seemingly “frivolous” things that wealthier people take for granted might be as impactful to a person’s life as having the basics. The article later mentions that the poor could “easily save more,” however, this assumption fails to account for the value of self-esteem. Although difficult (or impossible) to truly measure, spending money on a wedding festival, for example, may contribute more to a person’s overall happiness/quality of life than buying an extra pound of flour. People define themselves partially based on how others perceive them, so it may be important to keep up appearances in a sense. Additionally, people may choose to allocate their spending differently based on religious beliefs. Understanding this notion helped to clarify why on average, people living in poverty don’t spend every last penny available on food.
Toggle Commented Sep 11, 2019 on Readings for next week at Jolly Green General
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Sep 11, 2019