Economics Question: Does Poverty Force People to Spend More?

Is being poor self-reinforcing because it forces one to spend more on stuff a little bit at a time over time, as opposed to saving up and/or forking over a large sum at once, and eventually spending less?

I don’t consider myself “poor,” but I do have a personal situation that illustrates the question:

. . . → Read More: Economics Question: Does Poverty Force People to Spend More?

Is Socialism an Ex Ante Rationalization?

A while back, I asked if libertarian political theory was an ex post rationalization used simply to justify the cause of freedom without actually explaining why it worked. It seems reasonable to ask a similar question of socialism: is socialist political theory* simply a rationalization for pursuing a certain course of action?

At first . . . → Read More: Is Socialism an Ex Ante Rationalization?

Still No Sympathy for the Poor

Here’s Bryan Caplan:

What about the “losers”? Bite your tongue. When you call lower-income people “losers,” you’re falsely assuming that we’re all racing for the same finish line: material success. But to a large extent, lower-income people are just racing for other finish lines. Leftist outrage over income inequality is therefore deeply misguided. To . . . → Read More: Still No Sympathy for the Poor

Welfare

I’ve been meaning to comment on this for a very long while:

Many people think life without the welfare state would be chaos. In their minds, nobody would help support the less fortunate, and there would be riots in the streets. Little do they know that people found innovative ways of supporting each . . . → Read More: Welfare

What the 'Long Tail' used to refer to

More back to the future in a way.  Income, poverty and general distribution issues used to be bigger topics in both academic research as well as the media and public discourse.  I once had a whole class just in how to measure poverty.  Seems to be a resurgence in the whole topic.

American Community . . . → Read More: What the ‘Long Tail’ used to refer to

Household financial choice of the hapless households of India

In February 2010, I had the opportunity to visit Pudhuaaru KGFS in Thanjavur. This is a remarkable project which helps us see the interface between households and the financial system in a wholly new light.

What a difference 17 months makes! On that visit, I had found a little tenuous Reliance CDMA cover at . . . → Read More: Household financial choice of the hapless households of India

Foreign aid and development economics

The aim of main research agenda of development economics in the last century was to provide an evolving approach to curing the persistence of poverty and underdevelopment in world’s least developed and developing countries. High economic growth in developing countries in the last decades has changed many developing nations into middle-income countries. For instance, . . . → Read More: Foreign Aid and Development Economics

Poverty

There are two kinds of poverty: relative poverty and absolute poverty. One could define the latter as lacking certain qualities of life; for example access to a minimum of 1600 calories per day, shelter to keep you warm and dry, and clean clothing appropriate for your climate and culture. There are many people who . . . → Read More: Poverty

Why do the Poor Choose to Live in Cities?

In the recent edition of Yale Economic Review (link), Ed Glaeser, Matthew Kahn and Jordan Rappaport ponder one of the most difficult and challenging puzzles of urban economics:

“The 2000 U.S. Census shows that the average poverty rate in American cities drops significantly , from about 20% to 7.5%, as you move from the . . . → Read More: Why do the Poor Choose to Live in Cities?

Poverty, Income Inequality and Economic Development

Financial Times reports (link) on the new measure of poverty proposed by economists from Oxford University. The authors suggested the modification of current measure of poverty which, defined by the World Bank in annually published World Development Report, is currently set at the threshold of $1.25 per day or less. The new measure proposed . . . → Read More: Poverty, Income Inequality and Economic Development