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

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  • 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.

Suggested Citation

  • Ronald U. Mendoza, 2011. "Why do the poor pay more? Exploring the poverty penalty concept," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(1), pages 1-28, January.
  • Handle: RePEc:wly:jintdv:v:23:y:2011:i:1:p:1-28
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    File URL: http://hdl.handle.net/10.1002/jid.1504
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    Cited by:

    1. 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.
    2. repec:gam:jsusta:v:8:y:2016:i:3:p:272:d:65882 is not listed on IDEAS
    3. Serrano-Cinca, Carlos & Gutiérrez-Nieto, Begoña, 2014. "Microfinance, the long tail and mission drift," International Business Review, Elsevier, pages 181-194.
    4. Tsai Chi Kuo & Jessica Hanafi & Wan Chen Sun & Rex Aurelius C. Robielos, 2016. "The Effects of National Cultural Traits on BOP Consumer Behavior," Sustainability, MDPI, Open Access Journal, vol. 8(3), pages 1-20, March.
    5. Mussa, Richard, 2014. "Food Price Heterogeneity and Income Inequality in Malawi: Is Inequality Underestimated?," MPRA Paper 56080, University Library of Munich, Germany.
    6. Carlos Serrano-Cinca & Begoña Gutiérrez-Nieto & Nydia M. Reyes, 2013. "A Social Approach to Microfinance Credit Scoring," Working Papers CEB 13-013, ULB -- Universite Libre de Bruxelles.
    7. Richard Mussa, 2015. "Do the Poor Pay More for Maize in Malawi?," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(4), pages 546-563, 05-27.
    8. Alimukhamedova, Nargiza & Hanousek, Jan, 2015. "What Do We Know about Microfinance at Macro Glance?," CEPR Discussion Papers 10484, C.E.P.R. Discussion Papers.
    9. UNDP Regional Bureau for Africa, "undated". "Building an Integrated Inequality Dataset and the ÔSeven SinsÕ of Inequality Measurement in sub-Saharan Africa," UNDP Africa Policy Notes 2017-16, United Nations Development Programme, Regional Bureau for Africa.
    10. 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.
    11. Ronald Mendoza & Nicholas Rees, 2009. "Infant Mortality During Economic Downturns and Recovery," Working papers 0904, UNICEF,Division of Policy and Strategy.
    12. repec:spr:soinre:v:133:y:2017:i:2:d:10.1007_s11205-016-1368-4 is not listed on IDEAS
    13. Carlos Serrano-Cinca & Begoña Gutiérrez-Nieto & Beatriz Cuéllar Fernández & Yolanda Fuertes-Callén, 2013. "Poverty penalty and microfinance," Working Papers CEB 13-029, ULB -- Universite Libre de Bruxelles.

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