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The Economic Lives of the Poor
Open accessAbstract
The 1990 World Development Report from the World Bank defined the “extremely poor” people of the world as those who are currently living on no more than $1 per day per person. But how actually does one live on less than $1 per day? This essay is about the economic lives of the extremely poor: the choices they face, the constraints they grapple with, and the challenges they meet. A number of recent data sets and a body of new research allow us to start building an image of the way the extremely poor live their lives. Our discussion builds on household surveys conducted in 13 countries: Cote d'Ivoire, Guatemala, India, Indonesia, Mexico, Nicaragua, Pakistan, Panama, Papua New Guinea, Peru, South Africa, Tanzania, and Timor Leste (East Timor). These surveys provide detailed information on extremely poor households around the world, from Asia to Africa to Latin America, including information on what they consume, where they work, and how they save and borrow. We consider the extremely poor—those living in households where the consumption per capita is less than $1.08 per person per day—as well as the merely “poor”—defined as those who live under $2.16 a day—using 1993 purchasing power parity as benchmark. In keeping with convention, we call these the $1 and $2 dollar poverty lines, respectively.
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“Poverty is associated with a wide range of counterproductive economic behaviors.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Banerjee and Duflo 2007
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Metadata
- Authors
- Banerjee, A. V., & Duflo, E.
- Affiliations
- Abdul Latif Jameel Poverty Action Lab (US)
- Venue
- Journal of Economic Perspectives
- Publisher
- American Economic Association
- Published
- 2007-01-01
- Volume
- 21
- Issue
- 1
- Pages
- 141-167
- ISSN
- 0895-3309 (ISSN-L)
- PMC
- PMC2638067
- OpenAlex
- W3123192902
- Cited by
- 1,703
- References
- 2
- Citations by year
- 2026: 101 · 2025: 108 · 2024: 86 · 2023: 94 · 2022: 100 · 2021: 116 · 2020: 113 · 2019: 95 · 2018: 78 · 2017: 85 · 2016: 85 · 2015: 101 · 2014: 98 · 2013: 103 · 2012: 82
- FWCI
- 194.58
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Journal of Economic Perspectives (publishedVersion)
- PubMed (publishedVersion)
- PubMed Central (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- National Institute on Aging (P01AG005842)
- Topics
- Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
- Social Sciences › Development › Poverty, Education, and Child Welfare
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Microfinance and Financial Inclusion
- Keywords
- extreme poverty, household consumption, poverty line, labor supply, consumption patterns, household surveys, developing countries
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