Saturday, May 08, 2010

The Economics of Poverty

Esther Duflo talks about how to approach the issues of global poverty. Using scientific procedures to test out economic and educational benefits of aid, she provides an answer to three significant problems.

First, she addresses how to get people to provide immunization vaccines for their children. Setting up a camp increased full immunization rates by about three times the normal rate (17%), but with a kilo of lentils, the camps were able to raise the rate to approximately 38% of the local population.

Bed-net use (to help prevent malaria) similarly increased when provided for free originally. In fact, more people were willing to buy the nets later at $2 if they were given a free one previously.

Finally, school attendance increased average schooling years by about 40 years when children were dewormed or parents were educated on the returns of education. Thus, Duflo asks the world to not just guesswork their way through policy making regarding poverty issues, but rather, test out hypothesis on what could work and get the numbers on the comparative advantages.

Watch Esther Dulfo’s inspiring video here:

-Yashina Burns

Resources: TED