The poor think that any change that is significant enough to be worth sacrificing for will take too long. That’s why they focus on the here and now, write Abhijit Banerjee and Esther Duflo
The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim. Another explanation for their eating habits is that other things are more important in the lives of the poor than food.
It’s been widely documented that poor people in the developing world spend large amounts on weddings, dowries, and christenings, probably in part as a result of the compulsion not to lose face. The cost of weddings in India is well-known, but there are also less cheerful occasions when the family is compelled to throw a lavish party. In South Africa, social norms on how much to spend on funerals were set at a time when most deaths occurred in old age or in infancy. Tradition called for infants to be buried very simply but for elders to have elaborate funerals, paid for with money the deceased had accumulated over a lifetime. As a result of the HIV/Aids epidemic, many prime-age adults started dying without having accumulated burial savings, but their families felt compelled to honour the norm for adults. A family that had just lost one of its main potential earners might have to spend something like 3,400 rand (around $825), or 40% of the household annual per capita income, for the funeral party. After such a funeral, the family clearly has less to spend, and more family members tend to complain about “lack of food”, even when the deceased was not earning before he died, which suggests that funeral costs are responsible. The more expensive the funeral, the more depressed the adults are one year later, and the more likely it is that children have dropped out of school.
Not surprisingly, both the king of Swaziland and the South African Council of Churches (SACC) have tried to regulate funeral expenditures. In 2002, the king simply banned lavish funerals and announced that if a family was found to have slaughtered a cow for their funeral, they would have to give one cow to the chief’s herd. The SACC, rather more soberly, called for a regulation of the funeral industry, which, they felt, was putting pressure on families to spend more than they could afford.
The decision to spend money on things other than food may not be due entirely to social pressure. We asked Oucha Mbarbk, a man we met in a remote village in Morocco, what he would do if he had more money. He said he would buy more food. Then we asked him what he would do if he had even more money. He said he would buy better tasting food. We were starting to feel very bad for him and his family, when we noticed a television, a parabolic antenna, and a DVD player in the room where we were sitting. We asked him why he had bought all these things if he felt the family did not have enough to eat. He laughed, and said, “Oh, but television is more important than food!”
After spending some time in that Moroccan village, it was easy to see why he thought that. Life can be quite boring in a village. There is no movie theatre, no concert hall, no place to sit and watch interesting strangers go by. And not a lot of work, either. Oucha and two of his neighbours, who were with him during the interview, had worked about 70 days in agriculture and about 30 days in construction that year. For the rest of the year, they took care of their cattle and waited for jobs to materialise. This left plenty of time to watch television. These three men all lived in small houses without water or sanitation.
They struggled to find work, and to give their children a good education. But they all had a television, a parabolic antenna, a DVD player, and a cellphone.
Generally, it is clear that things that make life less boring are a priority for the poor. This may be a television, or a little bit of something special to eat — or just a cup of sugary tea. Festivals may be seen in this light as well. Where televisions or radios are not available, it’s easy to see why the poor often seek out the distraction of a special family celebration of some kind, a religious observance, or a daughter’s wedding. In our 18-country data set, it is clear that the poor spend more on festivals when they are less likely to have a radio or a television. In Udaipur, India, where almost no one has a television, the extremely poor spend 14% of their budget on festivals (which includes both lay and religious occasions). By contrast, in Nicaragua, where 56% of rural poor households have a radio and 21% own a television, very few households report spending anything on festivals.
The basic human need for a pleasant life might explain why food spending has been declining in India. Today, television signals reach into remote areas, and there are more things to buy, even in remote villages. Cellphones work almost everywhere, and talk time is extremely cheap by global standards. This would also explain why countries with a large domestic economy, where a lot of consumer goods are available cheaply, like India and Mexico, tend to be the countries where food spending is the lowest. Every village in India has at least one small shop, usually more, with shampoo sold in individual sachets, cigarettes by the stick, very cheap combs, pens, toys, or candies, whereas in a country like Papua New Guinea, where the share of food in the household budget is above 70% (it is 50% in India), there may be fewer things available to the poor.
Extracted from Poor Economics by Abhijit Banerjee and Esther Duflo (Random House India)