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Mirage at the Bottom of the Pyramid

  • Aneel Karnani

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    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.

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    File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp835.pdf
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    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp835.

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    Length: pages
    Date of creation: 01 Aug 2006
    Date of revision:
    Handle: RePEc:wdi:papers:2006-835
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    1. 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.
    2. Morduch, J., 1998. "The Microfinance Schism," Papers 626, Harvard - Institute for International Development.
    3. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and ... Convergence, Period," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 351-397, May.
    4. 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.
    5. Zeller, Manfred & Meyer, Richard L., 2002. "The triangle of microfinance," Food policy statements 40, International Food Policy Research Institute (IFPRI).
    6. Sharma, Manohar, 2000. "Microfinance," MP05 briefs 0, International Food Policy Research Institute (IFPRI).
    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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