PoorEco&SIP

7/30/2019 PoorEco&SIP

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Poor Economics,

Social Impact

& Us

Courtsey:A.Bannerjee, E.Duflo &

W.Easterly, D.Moyo...

Jeff and Rohit!


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Agenda

What is poverty

Anomalies in behaviour

Understanding the poor

SIP

There are two sides to the coin

What can we do?

Disclaimer


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Story of Farmer Kennedy

As told by Angelina Jolie!


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What does poverty mean

The Poverty Line in India is 16 rupees per person per day ~

$1/day

26% of India is BPL

Average GDP per capita $1500 : $5/day

The poverty line in the USA is $14/day.

Average GDP per capita US $47,400 : $129

865 million people in the world live with less than 99 cents

per day


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BPL - world


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Population living on


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Poverty Is Not Only Lack of Income

But also:

Poor health : 9 million children every year die

under the age of 5, mainly of preventable disease

Poor education : 50% of children enrolled in

school in India cannot read a simple paragraph

Poor quality of life: hours collecting water instead

of playing, working, learning. Difficulty to realize your ambition: Get a loan for a

business, be insured for the risk of your farm


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The Aid debate

Since 1980s $600 Billion

Jeffery Sachs

Poverty trap

Aid kick-starts virtuous cycle

William Easterly and Dambisa Moyo

2/3rd goes to corrupt dictators

Inhibits democracy, trade and develeopment


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The case of Pak Solhin

40s Wife, three children, Indonesia

Farm Laborer -> Increase in fertiliser prices ->

Drop in labor demand -> Low salary -> Cant feed

on that salary -> so cant take job -> picks easyfishes, cant swim -> too old to get more

skilled/labor job

First few calories just enough to survive, not to getstrength


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The income-growth curve


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When does a poverty trap emerge?

When we compare the different curve, there

is something specific about the first curve

The S-Shaped curve intersects the 45 degree line

from below:

So the poor become poorer (up to a point)

At some higher income, the rate of growth of

income start increasing How does it matter?


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Aid debate = Is there a poverty trap?

How to find out

Enter RCTs

J-PAL

www.pooreconomics.com


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Testing for poverty traps

Nutrition based trap

Health based trap

Education based trap


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Nutrition trap

Do poor eat as much as they can

In Udaipur, poor household could spend up to 30% more rest in

tobacco, alcohol, festivals, sweets etc

When chance to spend a bit more on food

Calories per rupee - millets (jowar and bajra) > Wheat and Rice. Yet 30%is spent on tastier

Is it that poor are small = dont need to consume more. Indian women

BMI only > Eritrea (81 country)

Has calorific consumption gone down because of less physical work?

Lack of Iron leads to lethargy and less aerobic capcity. Leads tosignificant health issues for pregnant women and its foetus

Cost of fortified fish oil is $7/year productivity gain $47/year


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Nutrition trap

Solhin gets access to free rice Rakshin program,

gets family help

Studies show deworming for 2 yrs leads to $3269

more lifetime earnings Costs $1.36 pp/yr

Problem is not the quantity of food (not for American

farmers!)

It is quality, certainly, and a lot of other factors

(psychological, knowledge, human weakness)


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Health trap

Story of Malaria and medication 880,000 deaths/year 91% in Africa; 85% saving 30%($295) >> $14


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Traditional economics tells us that, whenever

there is an externality, such that the private

incentives are not aligned to the social

benefit, tax or subsidies should be used toalign private incentives

Economic externality


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Less conventional economics

Sunk cost

No skin in the game

Entitlement effect

People will expect other things to be free

Sachs vs Easterly debate continues


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Health trap


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Health trap

Solution

Ask the right questions

Price-elasticity of nets

Avoid Biasdont compare across homogenous

samples -> RCT

What is the effect of adoption when already free

nets are given self or neighbour


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Demand at various prices


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Demand when nets were not free


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Health trap

Medication - Low hanging fruit?

9 Million die < 5yrs

20% die of Diarrhea

Simple, cheap, available cure ORS

But the mother wants antibiotics and IV drips

Chlorine ($0.18) can prevent for family of 6 10% use it

So, are the poor unwilling to spend on healthissues?


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Health trap

Ibu Emptat, Indonesian, wife of a basket weaver (summer 2008), her husband was having trouble with his vision.

She had to borrow money from the local moneylender 100, 000 rupiah ($18.75 USD PPP) to pay for medicine so that her

husband could work again, and

300,000 rupiah ($56 USD PPP) for food for the period when herhusband was recovering and could not work (three of her sevenchildren were still living with them).

They had to pay 10 percent per month in interest on the loan.However, they fell behind on their interest payments and by the timewe met, her debt had ballooned to 1 million rupiah ($187 USD PPP);

the moneylender was threatening to take everything they had Son falls sick and cant be treated health trap?


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Health trap

Lot of cheap/high-ROI options

Access to clean water

$20/month per household not many govt can afford

Gram Vikas does it cheaper in Orissa. But in Orissa itsalso a social issue high caste people wont allow pipeconnecting everyone

Chlroine costs 1/4th the cooking oil price

< 40% of babies are breast-fed for 6 months So, ladders to get out of poverty are probably

there


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Health trap

Udaipur very remote 1.5 miles only to nearest free public health 25%

visits

Bhopas (25%) and Bengalis (50%) instead most

unqualified All under-diagnose and over-medicate (3-3-3 rule)

3 minutes, 3 questions, 3 medicines

So is bad attendance, reliablility the issue?

Seva mandir initiative -> 6-16% still, 8/10 not vaccinated Is it sunk-cost effect: Free/cheap => worthless

Easterly Nets=Wedding veils, Toilets = flowerpots TAMTAM :: not true


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Health trap

Faith!

US/UK many refuse to vaccinate against measles,rumoured links to autism

Poor believe O.S drugs are ineffective Not much conviction though

Same people go to Bhupa, bengali and PHS

Seva Mandir 1Kg dal experiment 6-38%

Still 77% first shot without incentive 38% fullfive shots


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Education trap

Shantarama Widowed mother of six. First three schooled. Next two

dropped out

Schools available, free in most places now

Still 15-50% absenteeism The supply vs demand argument

MDG talks about schooling. Not learning

2002-03 Absenteeism survey Bangladesh, Ecuador, Peru, India & Uganda Teachers abscond 1

in 5 days ASER/Pratham survey (7-14 yrs), 2005

30% cant readh 1st grade level. 60% 2nd grade. 70% 2nd Math


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Education trap

Demand

Education is an investment => ROI drives adoption 2002, Bob Jensen, UCLA, BPO recruitment

5% increase in women enrolment;

Girls weighed more! Because parents decide to push or pull

Santiago Levy, BU, Mexican minister

Welfare with strings attached CCT very succssful

Compensation for wages lost allows parents to focus on future

Supply is not useless IndonesiaSuhartos oil money built lot of schools

8% extra wage for each year of schooling


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The answer

(Right) Aid + Education + implementation 3 Is

Ideology

Ignorance

Inertia

Education Health

Economics Risk! Insurance! Investment

Most important DATA!


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SIP Projects - RapidFTR

Conceived at, by a team of students in Clay

Shirky's Design For Unicef class. Further

developed by Jorge Just as his Masters thesis

Why?

2009, 43.3 million children displaced

Current record systems take 30-45 mins. 1:10,000

Why not Google person finder?

Rails, CouchDB, Mobile


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Testimonials

Presented at Qcon 2010

RapidFTR was named one of the Top 10 OpenSource Rookie Projects of 2010 by Black DuckSoftware (among Diaspora, OpenStack etc)

Martin Fowler on how RapidFTR code Jams work: To make meaningful progress, you need someone to prepare for each code

jam by breaking down work-items into something small enough that peoplewill be able to finish them during the time at the jam. Whatever people maysay and hope, they'll rarely work on the project outside code jam hours, andthe schedule is too infrequent to want half-done things hanging over. Small

tasks allow teams to make perceptible progress each jam - which helps keepmotivation high. We like to put these tasks online before each event so peoplecan prepare if they want to, or just get a feel for what we're working on. Wealso set up a mailing list to keep up regular communication on the jam andsupport anyone who does contribute outside of the jam.


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SIP Projects - OpenMRS

Regenstrief, (since 1970s) in collaboration with PIH

(Boston) and MRC (South Africa) -> OpenMRS

MISSION is to improve health care delivery in

resource-constrained environments by working

together as a globalcommunity to create a robust,

scalable, user-driven, open source medical record

system platform

Fight the big 3 epidemics: HIV/AIDS, TB, Malaria ->kills close to 40 Million every year

Unskilled care providers + badly designed

spreadsheets/databases

Possibilities of fatal mistakes


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OpenMRS

Java, Spring, Hibernate, MySQL, Groovy, XForms, jQuery, Maven, Jetty


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SIP Projects - Camfed

In sub-Saharan Africa: 24 million girls can't afford to go to school.

A girl may marry as young as 13 and has a one in 22 chance ofdying in childbirth

One in six of her children will die before the age of five

Research shows if you educate a girl shell: Earn up to 25% more and reinvest 90% in her family.

Be three times less likely to become HIV-positive.

Have fewer, healthier children who are 40% more likely to

live past the age of five.

Since 1993, Camfed works in Africa to show how the problemof girls' exclusion from education can be tackled.

Rails, Redis, Salesforce


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SIP ProjectNot B&V

OpenLMIS, Mifos, JSS

VictoryKit ?

WhoMadeMyPants

Black Girls code, CodePink, Wikimedia, I love

Iran, Bpeace


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