Tatyana Deryugina (Twitter: @TDeryugina)

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Poor Economics

Posted 21 May 11 by Tatyana

I just finished reading "Poor Economics” by Abhijit Banerjee and Esther Duflo, both MIT economics professors. The book was amazing and I highly recommend it. In summary, it is an excellent, evidence-based discourse about the behavior of the poor and the policies that work and don’t work to improve their lives. Abhijit and Esther cover how the poor make decision about how much to save, eat, and spend on their children’s education, why so many poor households run businesses but don’t become rich, and how political institutions can be improved.

Having never taken development economics, I learned a lot from the book. At the same time, it was written in everyday language and everything was incredibly clear and well-explained. Even though the authors clearly do have opinions, they arrive at most of them through examining the results of carefully designed research. They do their best to avoid generalization, exploring the complexity of the issues and dispelling the myths that the poor are somehow fundamentally different from the rest of us. Some of the findings were surprising and went against what I and others would have guessed (thus underscoring the need for rigorous research).

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