poverty

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1) Decision making when you’re in poverty is hard because every decision is critical. Taxes mental resources and self-control.

2) At Buenos Aires restaurants, diners who want salt now have to ask their waiters. Hat tip: Ramiro Lynch.

3) Apple made the shuffle function in the iPod “less random to make it feel more random,” according to Steve Jobs. Hat tip: John Kenny.

4) 100-calorie packs do reduce caloric intake among the heaviest.

5) The Optimism Bias – Time’s cover story.

6) Self-control for Max OS X.

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Innovations for Poverty Action’s Dean Karlan and Jacob Appel are out with their new book, More than Good Intentions: How a New Economics is Helping to Solve Global Poverty. As the title suggests, it’s based around their work applying behavioral economics to problems in international development. The focus is on making small changes in areas like banking, insurance, and health care that can produce dramatic improvements in decision making and well-being.

Says Richard Thaler: “Karlan is one of the most creative and prolific young economists in the world. His research lies at the intersection of two of the hottest areas in the field: behavioral economics and development microfinance… [His and Appel’s book is] a good follow-up to Freakonomics, Predictably Irrational, and Nudge with a development and poverty spin.”

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The Economist points out another last mile problem in fighting global poverty and argues for more nudges.

What is needed are little interventions: adding iodine to salt here, doling out vitamin A supplements there. Even relatively small doses work. Yet they also raise one of the great puzzles of development. These are, by some measures, the best investments you could make. When the Copenhagen Business School asked some Nobel-winning economists the best way to spend money to help the world, nutritional projects topped the poll. Vitamin A supplements cost just a dollar or two. Their benefits—preservation from fatal diseases, higher lifetime earnings—so massively outweigh the tiny costs that poor people ought to snap them up. Yet they don’t. Orwell put his finger on why. The poor want something tasty. They may not believe nutritional experts who promote special diets (rich Westerners have been known not to stick to diets, too). Or food itself may not be their priority. As Orwell said, “There is always some cheaply pleasant thing to tempt you.”

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