Discussion based on Abhijit Banejee and Esther Duflo's readings - Assignment Example

Economic Lives of the Poor This paper aims to present my review of two readings including “The Economic Lives of the Poor” and a chapter from the book, ‘Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty’ by Abhijit Banerjee and Esther Duflo. Furthermore, a discussion will be included referring to my learning from the readings of Banerjee and Duflo.The authors draw an important definition of the “extremely poor”, which was set out by the World Bank in its 1990 World Development Report” for their study.

This definition indicates the extremely poor are people across the globe, who are living on $1 per day or even less than that. Living under such harsh conditions make it difficult to have access to the basis necessities of live, which puts a question mark on their ability to survive. The available evidence on this is not complete in many ways. However, some new researches have recently added a sufficient amount data on this huge part of the global population, which provide enough information to form an understanding on how the poor people live their lives.

The assigned report details of a survey that was conducted in 13 different countries (Banerjee and Duflo). In addition, they have added two surveys, which were conducted in India (Udaipur District), which is one of the poorest districts of India.It is understood that there is a strong association between poverty and malnutrition. The poor has few real choices to make. Their earning is barely enough to fulfill their basic needs and therefore, they are majorly underfed and weak. The authors also highlight that one of the major reasons for the poor to spend the lowest on their food is that they often give more importance to other obligations or activities rather than for acquiring food.

The study by authors indicates that the poor spend a lot on alcohol and tobacco in different countries such as Papua, New Guinea, and India. According to the survey, Udaipur tops the list of being on the poorest districts of India, which spends highest on festivals. People feel an obligation to spend a large amount of their budget on occasions like weddings, funerals, and other religious festivals. They choose to spend more on non-food items and festivals than on food. Moreover, the extremely poor rarely spend on entertainment.

Another interesting finding from the study reflects that these people do not seem to be as hungry as one may expect.It is a common understanding that the poor will always search for ways to fulfill their food needs in the least expensive way. However, the study by Banerjee and Duflo suggests quite opposite. According to them, poor people tend to make choices on buying calories that are more expensive. For example, they spend 20% more on rice than they spend on millets, which cost more than twice as much per calorie.

In addition, they spend further 10% of their total budget on wheat, which is 70% more expensive and almost 7% on sugar, which is the most expensive way to get the calories. Because of these choices they get to buy lesser calories (Banerjee and Duflo).These findings from the author are not surprising for me. These are consistent with the discussions on the same issue made by the author Richard A. Goldthwait in his book, ‘The Economy of Renaissance Florence’ giving the same reasons as mentioned above.

Moreover, I understand that the main reason of not preferring the calories is the lack of awareness and education. However, these findings contradict with those presented by Debraj who is of the view that people living under poverty conditions are more likely to be malnourished as great fluctuations in their budgets, which do not allow them to spend on food providing them higher calories. The findings also support that there are immense social pressures in addition to economic hardships that make lives of the poor difficult (Collins, Morduch and Rutherford).

All these factors contribute to reason that the poor spend their money differently from us. Works CitedBanerjee, Abhijit V. and Esther Duflo. “The Economic Lives of the Poor.” Journal of Economic Perspective 21.1 (2007): 141-167. Print.Banerjee, Abhijit Vinayak and Esther Duflo. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. New York: Public Affairs, 2011. Print.Collins, Daryl, et al. Portfolios of the Poor. New Jersey: Princeton University Press, 2009. Print.Debraj, Ray.

Development Economics. New Jersey: Princeton University Press, 1998. Print.Goldthwait, Richard A. The Economy of Renaissance Florence. Maryland: JHU press, 2009. Print.