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The psychology and behavioural economics of poverty

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  • Anand, Paul
  • Lea, Stephen

Abstract

The paper provides an overview and assessment of an emerging literature on the psychology and behavioural economics of poverty. We particularly highlight poverty experiences, role of neighbourhoods, poverty dynamics and transmission, child poverty and disability and personal finance. In addition we consider psychology and policy responses by looking and autonomy and empowerment, and poverty reduction programs. Our central thesis is that the detailed knowledge of individual experiences, cognitions and social factors in psychology and related social science complements the traditional economic emphasis on structural factors and policy instruments in a way that is exemplified by emerging work in behavioural economics. We conclude it is increasingly recognised that poverty reduction policies which are informed by behavioural insights may, as a result, be more effective.

Suggested Citation

  • Anand, Paul & Lea, Stephen, 2011. "The psychology and behavioural economics of poverty," Journal of Economic Psychology, Elsevier, vol. 32(2), pages 284-293, March.
    • Handle: RePEc:eee:joepsy:v:32:y:2011:i:2:p:284-293
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    References listed on IDEAS

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    Cited by:

    1. Spears Dean, 2011. "Economic Decision-Making in Poverty Depletes Behavioral Control," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-44, December.
    2. Lim, Sung Soo & Bone, Matthew, 2022. "Optimism, debt accumulation, and business growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    3. Asadullah, Mohammad Niaz & Chaudhury, Nazmul, 2012. "Subjective well-being and relative poverty in rural Bangladesh," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 940-950.
    4. Ayllón, Sara & Fusco, Alessio, 2017. "Are income poverty and perceptions of financial difficulties dynamically interrelated?," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 103-114.
    5. Carmen H Logie & Jesse I R Jenkinson & Valerie Earnshaw & Wangari Tharao & Mona R Loutfy, 2016. "A Structural Equation Model of HIV-Related Stigma, Racial Discrimination, Housing Insecurity and Wellbeing among African and Caribbean Black Women Living with HIV in Ontario, Canada," PLOS ONE, Public Library of Science, vol. 11(9), pages 1-20, September.
    6. Elijah Macharia Ndung’u (PhD), 2021. "Trauma of Poverty and its Psychological Impact: A Case of Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(09), pages 906-915, September.
    7. Tomasz Potocki, 2022. "Locating Financial Capability Within Capability Approach – Theoretical Survey," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 96-106.
    8. Alex Lord & Philip O’Brien, 2017. "What price planning? Reimagining planning as “market maker”," Planning Theory & Practice, Taylor & Francis Journals, vol. 18(2), pages 217-232, April.

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