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Poverty and Aspirations Failure

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  • Dalton, Patricio S; Ghosal, Sayantan; Mani, Anandi

    (University of Warwick; Tilberg University)

Abstract

This paper models the role of internal constraints in causing aspirations failure at the individual level. It shows how initial disadvantage increases the likelihood of binding internal constraints and hence aspirations failure, thus suggesting a new behavioral explanation for poverty traps. In examining common approaches to relaxing such internal constraints, it describe how an individual’s endogenous choice of a "cognitive window" (i.e. a set of relevant "similar" individuals)can limit the e¤ectiveness of role models. Further, we consider how the distribution of initial status determines the degree of connectedness in a society and hence the individual perception of these constraints. Our work provides a normative justification for programs that aim to empower participants through a direct positive shock to their aspirations.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/research/papers/22.2010_revised.pdf
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Bibliographic Info

Paper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 22.

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Date of creation: 2010
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Handle: RePEc:cge:wacage:22

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Blog mentions

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  1. Poverty and Aspirations Failure
    by maximorossi in NEP-LTV blog on 2011-12-21 15:57:37
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Cited by:
  1. Dalton, P.S. & Ghosal, S., 2010. "Behavioral Decisions and Policy," Discussion Paper 2010-125, Tilburg University, Center for Economic Research.
  2. Solava Ibrahim, 2011. "Poverty, aspirations and wellbeing: afraid to aspire and unable to reach a better life – voices from Egypt," Brooks World Poverty Institute Working Paper Series 14111, BWPI, The University of Manchester.
  3. Patricio S. Dalton & Sayantan Ghosal, 2013. "Characterizing behavioral decisions with choice data," Working Papers 2013_22, Business School - Economics, University of Glasgow.
  4. Laura Camfield & Awae Masae & J. McGregor & Buapun Promphaking, 2013. "Cultures of Aspiration and Poverty? Aspirational Inequalities in Northeast and Southern Thailand," Social Indicators Research, Springer, vol. 114(3), pages 1049-1072, December.
  5. repec:cge:warwcg:106 is not listed on IDEAS
  6. Marcus Böhme, 2012. "Migration and Education Aspirations - Another Channel of Brain Gain?," Kiel Working Papers 1811, Kiel Institute for the World Economy.
  7. Dalton, Patricio & Ghosal, Sayantan, 2008. "Behavioural Decisions and Welfare," The Warwick Economics Research Paper Series (TWERPS) 834, University of Warwick, Department of Economics.
  8. Garance Genicot & Debraj Ray, 2014. "Aspirations and Inequality," NBER Working Papers 19976, National Bureau of Economic Research, Inc.

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