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Mirage at the Bottom of the Pyramid

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  • Aneel Karnani

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Abstract

Poor people ??? at the bottom of the pyramid (BOP) ??? represent a very attractive market opportunity. The ???BOP proposition??? argues that selling to the poor can simultaneously be profitable and help eradicate poverty. This is at best a harmless illusion and potentially a dangerous delusion. This paper shows that the BOP argument is riddled with fallacies, and proposes an alternative perspective on how the private sector can help alleviate poverty. Rather than focusing on the poor as consumers, we need to view the poor as producers. The only way to alleviate poverty is to raise the real income of the poor.

Suggested Citation

  • Aneel Karnani, 2006. "Mirage at the Bottom of the Pyramid," William Davidson Institute Working Papers Series wp835, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2006-835
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/57215/1/wp835.pdf
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    References listed on IDEAS

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    1. Arvind Virmani, 2006. "Poverty and Hunger in India: What is Needed to Eliminate Them," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 241-259.
    2. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and … Convergence, Period," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 351-397.
    3. Morduch, Jonathan, 2000. "The Microfinance Schism," World Development, Elsevier, vol. 28(4), pages 617-629, April.
    4. Zeller, Manfred & Meyer, Richard L., 2002. "The triangle of microfinance," Food policy statements 40, International Food Policy Research Institute (IFPRI).
    5. Sharma, Manohar, 2000. "Microfinance," MP05 briefs 0, International Food Policy Research Institute (IFPRI).
    6. Martin Ravallion, 2004. "The Debate on Globalization, Poverty and Inequality: why Measurement Matters," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    7. Khawari, Aliya, 2004. "Microfinance: Does it hold its promises? A survey of recent literature," HWWA Discussion Papers 276, Hamburg Institute of International Economics (HWWA).
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    Cited by:

    1. Mukul Asher, 2006. "India’s Rising Role in Asia," Working Papers id:727, eSocialSciences.

    More about this item

    Keywords

    Poverty; Bottom of the pyramid; Selling to the poor; social responsibility;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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