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Why do the poor pay more? Exploring the poverty penalty concept

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Author Info

  • Ronald U. Mendoza

Abstract

The poverty penalty refers to the relatively higher cost shouldered by the poor, when compared to the non-poor, in their participation in certain markets. By trying to further develop this concept, this paper clarifies some of the subtle and more direct ways through which the poor could be marginalised in the market system. A brief review of the business and economics literature suggests that there are different possible causes behind various forms of the poverty penalty, and hence distinct ways to address them, depending on its form, the nature of the market under analysis, the specific country context, the characteristics of the poor themselves and the prevalence of market failures among other factors. Copyright (C) 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jid.1504
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 23 (2011)
Issue (Month): 1 (January)
Pages: 1-28

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Handle: RePEc:wly:jintdv:v:23:y:2011:i:1:p:1-28

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Web page: http://www3.interscience.wiley.com/journal/5102/home

Related research

Keywords: information ; poverty penalty ; market failure ; catastrophic health spending ;

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Cited by:
  1. Serrano-Cinca, Carlos & Gutiérrez-Nieto, Begoña, 2014. "Microfinance, the long tail and mission drift," International Business Review, Elsevier, vol. 23(1), pages 181-194.
  2. Ronald Mendoza & Nicholas Rees, 2009. "Infant Mortality During Economic Downturns and Recovery," Working papers 0904, UNICEF,Division of Policy and Strategy.
  3. Gibson, John & Kim, Bonggeun, 2013. "Do the urban poor face higher food prices? Evidence from Vietnam," Food Policy, Elsevier, vol. 41(C), pages 193-203.
  4. Mussa, Richard, 2014. "Do the Poor Pay More for Maize in Malawi?," MPRA Paper 54623, University Library of Munich, Germany.
  5. Mussa, Richard, 2014. "Food Price Heterogeneity and Income Inequality in Malawi: Is Inequality Underestimated?," MPRA Paper 56080, University Library of Munich, Germany.
  6. Driouchi, Ahmed & Mertou, Amat, 2012. "High Implicit Interest Rates in the Context of Informal Traditional Housing Transactions: Evidence from Morocco," MPRA Paper 38732, University Library of Munich, Germany.

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