HOW TO LIVE ON ONE DOLLAR A DAY.

April 25, 2007 at 7:54 PM · Economics, History

HOW TO LIVE ON ONE DOLLAR A DAY. Tim Horford (the Undercover Economist) reports in this article on how people live on one dollar a day. It is estimated that 21% of the people in the world lived on less than one dollar a day in 2001. The good news is that twenty years earlier, in 1981, 40% of the people in the world lived on less than a dollar a day. Horford relies on a moving description of the lives of the very poor by Abhijit Banerjee and Esther Duflo. These people are heartbreakingly poor. During the course of a year, in 37% of these households, the adults in the household went without a meal for an entire day. In Udaipur, India, 55% of the adult poor are anemic. Yet these extremely poor people do not spend all their income on food. They do not live on bread alone. The median extremely poor household in Udaipur spent 10% of its annual income on festivals, including weddings, funerals and religious festivals.

9 comments

Richard Weisfelder April 25, 2007 at 8:30 pm

I wonder whether pundits who measure the percentage living on a dollar a day have controlled for inflation and the buying power of the dollar. Moreover, I remember reading something that pointed out the following. Hypothetically 20% of people could move from 98¢ per day to $1.02 producing the sort of data described above, but with no meaningful change in their situation whatsoever.

Philip April 25, 2007 at 11:10 pm

These studies are supposed to have been corrected for price changes. At this level of income, measurement errors could make a large difference. And measurement problems mean for me that I am reluctant to draw conclusions except when the differences are quite large. And there is something baffling for us in the Western world: can it really be one dollar a day? Nevertheless, I think these conclusions hold up. This is how a lot of people live.

Pater Familias » ARE THE VERY POOR DOING BETTER? April 29, 2007 at 9:19 pm

[...] THE VERY POOR DOING BETTER? I missed the point of Dick Weisfelder’s comment on my post HOW TO LIVE ON ONE DOLLAR A DAY. Dick wrote, “I wonder whether pundits who measure the [...]

Lee August 13, 2007 at 9:17 am

I remember reading somewhere that if you have a checking account you’re wealthier than some shocking percentage of the rest of the world. I don’t think most people realize that even the very poor here in the United States suffer far less than the rest of the world. I’d even bet most cash-strapped young workers or students wouldn’t bat an eye at a $4 or $5 a day Starbucks habit.

Pater Familias » RELATIVE INCOME VERSUS ABSOLUTE INCOME. October 26, 2007 at 5:10 pm

[...] to the roughly 20% of the people in the world who live on less than a dollar a day (discussed here). An example given here is: “in 1905 an individual in the United States unable to afford a car [...]

Pater Familias » LOOKING BACK: ECONOMICS FORTY YEARS AGO—DEVELOPMENT. November 11, 2007 at 11:58 am

[...] LOOKING BACK: ECONOMICS FORTY YEARS AGO—DEVELOPMENT. Forty years ago in economics, one of the most exciting subjects was a new one. Courses were being offered in Development Economics. Now that England and other Western countries had shown the way, we believed that other countries (“undeveloped countries” then, soon to be known as “lesser developed countries”) should be able to follow their lead, especially because they would be able to take advantage of all that development economists had learned and would learn. I was not as optimistic as some, but the results over the last forty years have been deeply disappointing. My disappointment can be measured by the fact that twenty to forty per cent of the people in the world still live on about one dollar a day, as discussed here. [...]

Pater Familias » UPDATE—LIVING ON ALMOST FIVE DOLLARS A DAY. December 15, 2007 at 10:33 am

[...] are making a step up in the world from extreme poverty (defined as living on $1 a day, as discussed here) —but not through high tech jobs. They have taken jobs at a retail store, Pantaloon. They are paid [...]

Pater Familias » HOW THE MIDDLE CLASS LIVES ON $2 TO $10 A DAY. February 6, 2008 at 7:04 pm

[...] THE MIDDLE CLASS LIVES ON $2 TO $10 A DAY. I posted here and here on an article describing how the very poor live on $1 a day and here on some young people [...]

MEASURING “ESCAPES FROM POVERTY.” | Pater Familias May 29, 2008 at 11:23 am

[...] I don’t think that the new poverty line is of much use in telling us who is poor. When I posted here on studies of how people (twenty to forty per cent of people in the world!) live on one dollar a [...]