I have been fiercely promoting this book since I started reading it. In particular, the post “Poor people think differently“. But now that I’ve finished it – it gets a post of its own.
Here is a list of the things that I found especially interesting:
- People give more money when the cause has a face. That is: if you’re going to fund-raise – make sure that your posters have a poster-child, with a name, face and story. It works better than “there are millions and millions of poor starving children” (apparently we get overwhelmed by the scale of the problem). However – DON’T tell people why you chose to use poor little Simphiwe over the millions. It seems that, when we’re made aware of our bias, then our tendency is to give the kid less, not the millions more. Awkward!
- Nutritional poverty traps don’t look empirically sound. The poor would rather save to buy a television.
- And actually, as the very poor earn more, they eat less! There is a tendency to swap out for less nutritious food – especially treats.
- When it comes to healthcare, sometimes “free” isn’t good enough. Immunisation programs in India have had very limited success – but they’re free, so the question is why the moms aren’t bringing their kids around. No one really knows why (some think it’s a lack of belief in the necessity) – but the suggested answer is that the poor are, in fact, human as well (shocking – I know*), and that they’re just as guilty of procrastination. Because when mothers were given a free bag of lentils with every immunisation, attendance suddenly spiked. And actually, despite the cost of the lentils – the whole program turned out to be less costly, because the nurse was able to move on from the village quicker instead of hanging around earning by the hour. So maybe we should be paying people to do what’s good for them?
- Poor people have lots of children to act as an insurance policy in their old age. After all, when all that’s required is feeding, then the marginal cost of an additional mouth is not that high**.
- The poor often make their own complex financial instruments. I mean – the phrase “bare-foot hedge fund managers” is magnificently apt. In and amongst themselves, their financial arrangements are sophisticated – inter-communal loans and stokvels and the construction of houses as a type of savings scheme (literally – one brick at a time).
It’s worth the time, I think.
*I’m being ironic. Just to be clear. In case anyone starts accusing me otherwise!
**Shows you how different the middle and upper classes are, when you compare it to the numbers in my Procreative Finance post. And perhaps it explains why the poor will always be with us?