Esther Duflo

Interesting summary of what we know (and don’t) about how poor people make decisions. Poor people are people! So they behave like people under resource constraints; when it comes to healthcare, that also includes information constraints (not really knowing much about vaccination, for example, including often lacking trustworthy sources of information). Some self-protective measures can also limit the upside of taking risks that might pay off—like people who spend money as it comes in so that they don’t get pressured to give it to needy family and friends. The research also suggests that microcredit has a limit—most businesses that poor people work in inherently don’t scale well, so expecting entrepreneurship to save poor people is a mistake. Given that poor people have to take way too many risks, it’s understandable that their ambitions for their children often are stable (ideally government) employment rather than entrepreneurship.… (mer)