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USING BEHAVIORAL ECONOMICS TO REDUCE POVERTY AND OPPRESSION
Published online by Cambridge University Press: 05 February 2024
Abstract
Until recently, economics conceived of poverty solely as a lack of material resources. This view likely captures the reality of poverty experienced by many people around the globe. However, two waves of behavioral economics demonstrate that the narrowing of people’s external environments may change people themselves: poverty lowers the quality of decision-making and poverty and oppression may depress the capacity to aspire. Poverty and a history of oppression also change how individuals are perceived. To overcome these effects may require helping people acquire new mental models. This essay discusses key findings from behavioral economics, the implications for agency, and some interventions with promising outcomes. We hope to inspire scholars and policymakers to think more deeply about the nature of poverty and oppression and to consider policies that target the psychological and sociological factors that create cycles of poverty.
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- © 2024 Social Philosophy & Policy Foundation. Printed in the USA
Footnotes
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Department of Economics, Columbia University, kh2830@columbia.edu; Department of Sociology, University of Washington, allisone@uw.edu. Competing Interests: The authors declare none. We would like to thank the editors, Tauhidur Rahman and David Schmidtz, and the other contributors to this volume, especially Johannes Haushofer and Naila Kabeer, for helpful discussion and comments on an earlier version of this essay.
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