3 Studies on Money in Impoverished Areas


SEATTLE, Washington — In impoverished areas, the distribution of money remains a problem that has puzzled economists and researchers alike. No one seems to have a clear answer on the correct economic approach for disadvantaged countries. There is so much that is not understood that a case of rapid economic growth, like Japan’s rise in the 1960s, is often referred to as an “economic miracle.” In an attempt to combat this storm of confusion and conflicting information, researchers around the world conduct experiments and publish studies on money in impoverished areas. The following three studies focused on how these disadvantaged countries could use their money to provide medicine, impact a family with a small loan or help local organizations that strive to improve the area around them.

Free Medicine for Global Health

One study conducted by Michael Kremer of Harvard University focused on the price of medicine in impoverished areas. Kremer recorded the number of mothers who would give their children deworming medicine when it was $1. Kremer then made the medicine compared his results with those who would give it if it were free.

In extremely poor countries, Kremer found that mothers were much more likely to give their children deworming medicine if it was free. In fact, 75 percent administered the free pills to their children; whereas, only 18 percent bought the medicine when it was $1. In light of this research, Kremer urged foreign aid organizations to provide free medicine if they hope to achieve tangible change in global health.

Amylene Dingle’s Story

Another study on money in impoverished areas began with the story of Amylene Dingle. Amylene Dingle lived in a small neighborhood in the Philippines on around 80 dollars a week. Dingle had always wanted to start her own business, but she didn’t have the resources to do so or a high enough credit score for a bank loan. All this changed when she secured a small loan from Tala, a company that uses smartphones to grant loans across the world.

With this money, Dingle bought cold cuts and other meats and sold them door to door, making a small profit after repaying the loan plus interest. Today, Dingle runs a rapidly growing food business and lives on around $250 a week. Amylene Dingle’s story leads companies like Accenture to believe that introducing traditional banks and providing small loans in impoverished areas could not only pull them out of poverty but also access an untapped $380 million market for the banks.

The Mawe Group

The final study on money in impoverished areas revolves around the idea that women in poor areas of Kenya have been saving their money to help each other out of poverty. This program is known as the Mawe group. It was founded in 2017 to help its members buy land and build houses for their families. It works through a collection fund that goes to the women in the group as they need it.

Each member makes a monthly contribution to the Mawe collective fund of at least 4,000 shillings, about $40. Members then use this money to buy plots of land or the resources to build houses on them. Currently, every member of the Mawe group has bought plots of land throughout Kenya’s Nakuru County. Mawe group’s practice of pooling resources has inspired similar local organizations that hope to improve their society at a local level.

These studies provide economists with valuable information about human tendencies and spending habits. Uncovering stories about local organizations fighting poverty, loans that change a family’s future forever or statistics showing the difference $1 can make in the health of a child affect poverty worldwide. Foreign aid organizations will look at these statistics and find the optimum way to help a disadvantaged community. Researchers hope that these results help cultivate the best economic situation for those suffering from poverty.

Charles Nettles
Photo: Flickr


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