Poor people make rational decisions based on their circumstances from "summary" of Poor Economics by Abhijit Banerjee,Esther Duflo
The idea that poor people make rational decisions based on their circumstances may seem counterintuitive to many. It goes against the common belief that poverty is a result of poor decision-making or laziness. However, when we take a closer look at the daily lives of the poor, we begin to understand why they make the choices they do. Living in poverty means facing a constant struggle to meet basic needs such as food, shelter, and healthcare. With limited resources and a lack of financial stability, the poor must carefully consider every decision they make in order to survive. This often leads them to prioritize immediate needs over long-term goals, as they simply cannot afford to think too far ahead. For example, a poor farmer may choose to sell his harvest at a lower price than he could get later in the season because he needs the money to feed his family that day. While this decision may seem shortsighted to...
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