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The Economic Lives of the Poor

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  • Abhijit V. Banerjee
  • Esther Duflo

Abstract

The 1990 World Development Report from the World Bank defined the "extremely poor" people of the world as those who are currently living on no more than $1 per day per person. But how actually does one live on less than $1 per day? This essay is about the economic lives of the extremely poor: the choices they face, the constraints they grapple with, and the challenges they meet. A number of recent data sets and a body of new research allow us to start building an image of the way the extremely poor live their lives. Our discussion builds on household surveys conducted in 13 countries: Cote d'Ivoire, Guatemala, India, Indonesia, Mexico, Nicaragua, Pakistan, Panama, Papua New Guinea, Peru, South Africa, Tanzania, and Timor Leste (East Timor). These surveys provide detailed information on extremely poor households around the world, from Asia to Africa to Latin America, including information on what they consume, where they work, and how they save and borrow. We consider the extremely poor -- those living in households where the consumption per capita is less than $1.08 per person per day -- as well as the merely "poor" -- defined as those who live under $2.16 a day -- using 1993 purchasing power parity as benchmark. In keeping with convention, we call these the $1 and $2 dollar poverty lines, respectively.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.21.1.141
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 21 (2007)
Issue (Month): 1 (Winter)
Pages: 141-168

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Handle: RePEc:aea:jecper:v:21:y:2007:i:1:p:141-168

Note: DOI: 10.1257/jep.21.1.141
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  1. Abhijit Banerjee & Angus Deaton & Esther Duflo, 2003. "Wealth, health, and health services in rural Rajasthan," Working Papers 253, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
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  8. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers.
  9. Anne Case & Angus Deaton, 2005. "Health and Wealth among the Poor: India and South Africa Compared," American Economic Review, American Economic Association, vol. 95(2), pages 229-233, May.
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  17. Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 635-672, May.
  18. Abhijit Banerjee & Rohini Somanathan, 2004. "The political economy of public goods: Some evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 04-17, Indian Statistical Institute, New Delhi, India.
  19. Abhijit V. Banerjee & Paul J. Gertler & Maitreesh Ghatak, 2002. "Empowerment and Efficiency: Tenancy Reform in West Bengal," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 239-280, April.
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  1. Articles for Journal Clubs
    by Liam Delaney in Geary Behaviour Centre on 2010-06-22 17:50:00
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