Assignment 2: Low Hanging Fruit

In Chapter 3 of Poor Economics Banergee and Duflo discuss health issues in regards to the health based poverty trap, focusing mainly on developing countries. While there are many initiatives available that could improve the quality of life and health for the poor, many people do not use them. Mosquito netting, health care, and water treatments are all widely available, but rarely seem to be used. The authors’ core theme is that poor people do not partake in opportunities to improve their future welfare even though they are offered at a low-cost.

One statistic I found interesting was that children who grow up malaria-free earn up to 50% more for their entire adult life. The authors continue the section by comparing the future wealth of the child and the cost of the net in Kenya. They conclude that over the child’s lifespan, buying a net for $14 USD would be a good decision because the child would earn an additional $88 per year. This reenforces the authors original thesis that idividuals in poverty do not take advantage of opportunities that could improve future welfare.

There are several issues with the statistics presented by the author. First, the statistic includes all children, not just the ones in poverty. Including all children can be misleading because children who are initially wealthy have better opportunities such as education and access to vaccinations. Education and vaccines can also be indicators of future wealth. Second, the statistics indicate that the child could make UP TO 50% more. Making more money is not a guarantee and if child does not have a higher income, purchasing the net could not be beneficial. Also, purchasing a mosquito net does not guarantee that the child will not get malaria.

Overall the authors make a valid point about poor people not taking advantage of opportunities that could improve their future welfare, however the authors do not analyze the reasoning behind the choices of those in poverty.

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