Global Poverty

Meet the Gluttons who spend 75% of their money on food

Todd A. WatkinsTodd A. Watkins

Who on earth spends 75% of their money on food? It’s not gluttons; quite the opposite. Turns out that that who on earth are many of the earth’s poor. The tragic incongruity: it’s those who spend relatively the most on food who go the hungriest.

It is difficult for most of us in rich countries to imagine what it is like to live on $1.90 a day or less, the level the World Bank uses to define extreme poverty. (It’s a weird number, $1.90, because it was set at $1/day way back in 1996 prices.) MIT Economics Professors Abhijit Banerjee and Esther Duflo wondered the same thing and set out to find out in 13 countries.[i]

They found that in poor households, half to three-quarters of all their money goes for food (compare that to the average 6% in the US). As we see among the bullet items below, access to running water, latrines and electricity is low in most places, but highly variable across countries. Infant mortality is problematic. So is anemia.

More detailed assessment in rural Udaipur in northern India found that while most poor households had beds, few had chairs or bicycles, and almost none had fans or sewing machines. Even tables were out of reach luxuries for 19 out of every 20 poor families. Illness and malnutrition were commonplace. Access to financial tools was not.

Among those living on $1.90 a day or less [$1.25 when they did the study]:

  • Typical living arrangements: 6-12 people per household
  • Food as % of total expenses: 56-78%
  • Households with radio: 11% Udaipur; 30% Pakistan; >70% Peru
  • Access to tap water: 0% Udaipur; <5% East Timor; 36% Guatemala
  • Access to latrine: 0% Udaipur; 100% Nicaragua
  • Access to electricity: 1% Tanzania; 30% Guatemala; 99% Mexico.
  • Infant mortality rate: 3% Indonesia; 9% South Africa; 17% Pakistan

Specifically, in Udaipur, India:

  • Rate of ownership of other productive assets,
    • Bicycle: <14%
    • Chair or stool: 10%
    • Clock or watch: 50%
    • Table: 5%
    • Cot or bed: ~100%
    • Electric fan: <1%
    • Sewing machine: <1%
  • Adults go for an entire day w/out meal at some point in year: 37%
  • Underweight adults: 40% females; 65% males
  • Anemic adults (insufficient red blood cells): 55%
  • Bedridden or doctor visit due to illness within last month: 46%
  • Difficulty carrying out at least one “activities of daily living”: 43%
  • Have formal savings account: 6%

As I explored in a previous post, thankfully the fraction of the global population living in extreme poverty has been falling steadily for decades, Even so hundreds of millions remain.

Tonight when you pull up a chair at your table for dinner, take a moment and think about the millions and millions who still have none of those three things.

 

[i] Source: A. Banerjee and E. Duflo, (2007). “The Economic Lives of the Poor.” Journal of Economic Perspectives 21(1) 141-68.

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