THE OTHER EXPENDITURES OF THE VERY POOR.

THE OTHER EXPENDITURES OF THE VERY POOR. What do people with less than one dollar a day income spend their money on–other than the calories to live on? You could think of these expenditures as little luxuries that people choose despite the fact that they are undernourished. The article by Banerjee and Duflo that I linked to yesterday makes a strict comparison with spending all one’s income to get the most calories. Looked at this way, in Udaipur, any expenditure on food other than millet is an extra expenditure. The poor allocate about one third of their grain budget on rice and wheat, which are more expensive per calorie than millet. About 10% of their total budget goes to sugar and processed foods. About half of each increase in expenditure on food goes to more calories; about half goes to more expensive food. In Udaipur most of the extremely poor households have a bed or cot; about half have a clock or watch; about 10% have a radio; and about 10% have a chair or stool. In Udaipur, households spend about 5% of their total annual budgets on alcohol and tobacco. Desperately hungry people want more than bare subsistence.