Poor Economics

Recommended Reading: Poor Economics by Abhijit Vinayak Banerjee and Esther Duflo Today's recommended reading is Bannerjee and Duflo's "Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty". The radical rethinking in the tagline relates to the application of the scientific method, in the form of randomised controlled trials, to understand the choices and behaviours of the poorest people of the world. In the same way pharmaceutical companies test drugs, Bannerjee and Duflo seek to document the actual effects of developmental interventions on the ground. Conversations with people living on less than a dollar a day demonstrate that they are prey to the same apathy, procrastination and mistaken thinking as the rest of us. But where society frames the choices of the wealthy, the poor are responsible for even minute areas of their own lives; often placing faith in expensive cures, for example, rather than access preventative immunisations for which the "pay-off" comes in the future. The poor are required daily to make complex economic decisions that people in developed societies rarely confront. Understanding the thinking behind the decisions enables us t

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