PROBLEMS DUE TO

POVERTY
 DEFINITION OF
POVERTY

•Poverty is the lack of basic human needs, such as

clean water, nutrition, healthcare, education, clothing
and shelter, because of the inability to afford them.
This is also referred to as absolute poverty or
destitution.
 TYPES OF POVERTY

 A. Individual
 Poverty is explained by individual
circumstances and/or characteristics of poor
people.
 Some examples are: amount of education, skill,
experience, intelligence. health, handicaps, age.
work orientation, time horizon, culture of
poverty. discrimination, together with race,
sex, etc.
 B. Aggregate
 There are two types of aggregate poverty
theory: case and generic. There is no agreement
on which is the correct explanation of most
poverty.
 1. Case. Add up all poverty explained by
individual theories, and that is equal to total or
aggregate poverty. In other words, according
to case theories of poverty, individual and
aggregate explanations are really the same.
According to these theories, aggregate poverty
is just the sum of individual poverty.
 2. Generic. Poverty is explained by general,
economy-wide problems, such as inadequate
non-poverty employment opportunities
inadequate overall demand (macro problems,
macro policy) low national income (Less
Developed Country)
 If generic theories are correct, poverty is caused
by one set of forces (general, economy-wide
problems) but distributed according to
individual theories
 Poverty as a Social Problem:
 We have all felt a shortage of cash at times. That is an individual experience.
It is not the same as the social problem of poverty. While money is a measure
of wealth, lack of cash can be a measure of lack of wealth, but it is not the
social problem of poverty. See "Principles."
 Poverty as a social problem is a deeply embedded wound that permeates
every dimension of culture and society. It includes sustained low levels of
income for members of a community. It includes a lack of access to services
like education, markets, health care, lack of decision making ability, and lack
of communal facilities like water, sanitation, roads, transportation, and
communications. Furthermore, it is a "poverty of spirit," that allows members
of that community to believe in and share despair, hopelessness, apathy, and
timidity. Poverty, especially the factors that contribute to it, is a social
problem, and its solution is social.
 We learn in these training web pages that we can not fight poverty by
alleviating its symptoms, but only by attacking the factors of poverty. This
handout lists and describes the "Big Five" factors that contribute to the social
problem of poverty.
 The simple transfer of funds, even if it is to the victims of poverty, will not
eradicate or reduce poverty. It will merely alleviate the symptoms of poverty
in the short run. It is not a durable solution. Poverty as a social problem calls
for a social solution. That solution is the clear, conscious and deliberate
removal of the big five factors of poverty.
 CAUSES OF POVERTY
 Warfare
 Agricultural Cycles
 Droughts and Flooding
 Natural Disasters
 Colonial Histories
 Centralization of Power
 Corruption
 Environmental degradation
 Social Inequality
FACTORS THAT CSE POVERTY
 PROBLEMS OF POVERTY
•Less Energy
• Low Efficiency

•Polluted Environment

•These are some of the major problems of poverty

all the other problems either evolve from these or

rotate around these problems.
 INDIA ON THE ENERGY MAP
Commercial energy production and per capita, 1999

COUNTRY Commercial energy use Commercial Energy

per capita (kg of oil Production (thousand
equivalent) metric
tones of oil equivalent )
USA 1,687,886 8159

China 1,056,963 868

Bangladesh 14,474 139

India 409,788 482

 PROBLEMS OF POVERTY
 Problems of Poverty
 Low energy consumption
 Low energy efficiency
 Higher energy dependence
 High energy intensity
 Higher environmental stress
 Dirty environment
 Higher Impact on health
 Lower adaptability
 Greater vulnerability to natural calamity
 SOME OTHER PROBLEMS
 Indoor air pollution
 Lighting Indian Homes
 Fuel Index
 Some of the problems of poverty
 The federal poverty level is approximately $16,000 for a family of
three and $19,000 for a family of four. However, research clearly
shows that, on average, it takes an income of at least twice the
federal poverty level to cover a family’s most basic expenses
 Twelve million children live in families with incomes below the
federal poverty. Perhaps more stunning is that 5 million children
live in families with incomes of less than half the poverty level—
and the numbers are rising!
 
 Hunger is defined as the uneasy or painful sensation caused by
lack of food. When "hunger in America" is discussed, people are
referring to the lack of access to sufficient food due to poverty or
constrained resources, which can eventually lead to malnutrition.
 
 Food security refers to assured access at all times to enough food for an
active, healthy life, with no need for emergency food sources or other
extraordinary coping behaviors in order to meet basic food needs. Food
insecurity refers to the lack of access to enough food to fully meet basic needs
at all times due to lack of financial resources. 

 Households classified as hungry are those in which adults have decreased

the quality and quantity of food they consume because of lack of money to
the point where they are likely to be hungry on a frequent basis. Households
in which the children's intake of food has been reduced due to lack of family
financial resources to the point that children are likely to be hungry on a
regular basis and the adults' food intake is severely reduced are also
classified as hungry. 

 Even when hunger is not present, households can be classified as food

insecure. These households are so limited in their resources to buy food that
they are running out of food, or reducing the quality of food their family eats,
or feeding their children unbalanced diets, or the adults are skipping meals
so their children can eat. These actions occur as an adjustment to the
economic problems that threaten the adequacy of their family's diet.    
 For more information please visit the Food Research and Action Center  
 Food is a fundamental human need. The 2001 Hunger and Homelessness
Survey released by the U.S. Council of Mayors showed that the economic
slowdown has led to an increase in demand for food assistance across the
country. The cities included in the survey reported an average increase of
23% in requests for emergency food assistance. Slightly over half of the
people requesting emergency assistance were members of families. About
37% of the adults asking for food assistance were employed.
 
 Households participating in a telephone survey were asked if they had
enough money for food in the 12 months prior to the survey. Paying for
food was a major problem for 2%, and a minor problem for 15%.
 
 The housing costs in Monroe County are among the highest in the state.
About 56% of Monroe County households spend more than 30% of their
income on rent each year. For some individuals, a lack of adequate
education and job skills limits their employment options and earning
capability. About 36% of the individuals considered “low income” in the
SCAN report completed no more than a high school education or GED
equivalency; an additional 25% in this category had less education.
 
 “Finding a job that pays enough to make ends meet,” and “paying for
rent or mortgage” were the two most prevalent economic challenges
for families in Monroe County identified through the SCAN report.
  
 The median household income (2000) for Monroe County is $33,311.
(87th of 92 counties in Indiana)
  
 There are 401 Monroe County families receiving TANF in 2001 (16th
in the state), and 4,423 Food Stamp recipients (17th in state).
  
 The unemployment rate (June 2003) was 3.1% (88th in state).
  
 The percentage of children under 18 living in poverty (2000) was
11.8% (35th in state).
POLLUTION FROM HOSEHOLD
APPLIANCES
 FUEL INDEX
 90% of households in small villages rely on
fuels like firewood, animal dung and crop
residue
 88% of rural women population used these
fuels for their daily cooking.
 FUEL TYPE WEIGHT
Dung 1.00

Saw dust 0.97

Crop residue 0.96

Fuel wood 0.82

Coal 0.46

Charcoal 0.31

Kerosene 1.00

Liquid Petroleum Gas 0.05

Biogas 0.04

Electricity 0.08
 Restricted economy, Greater
vulnerability

 Taxes and Tariffs reduce consumption

 and competitiveness and efficiency
 Poor are most vulnerability to natural calamity
 Lighting – Bulbs to CFLs – taxes, tariff, procurement
policy
 Automobile – 180% import duty, 50% taxes,
 Fuel – 30-40% taxes on petroleum product
 Refrigerator – CFC and frost free, energy efficient, but
…
 Floods – annually 1000s die in South Asia, in Florida
toll ranges in 10s
Share of commercial energy
worldwide
 POVERTY KILLS TODAY
 Debate on global warming, shifts focus from
problems of today to ‘day after tomorrow’
 Concerns about sea level rise in future, but
thousands die each year due to floods today
 Millions die today from preventable diseases of
poverty, but focus is on diseases of the future
 Energy Abundance

 Higher energy consumption

 Higher energy efficiency
 Lower dependence on energy resources
 Lower energy intensity
 Lower environmental stress
 Cleaner environment
 Lower impact on health
 Higher adaptability
 Lower vulnerability to natural calamity
 Conservation through
Consumption

 Development is the Key that unlocks the

potential of increased consumption
 Economic freedom creates the competitive
environment for harnessing human creativity
leading to efficiency gains
II. Case vs. Generic Theories of Poverty
 A. What difference does it make whether poverty is
caused by case or generic causes?
 Answer: It makes a lot of difference.
 Example #1: Suppose somehow we significantly reduce
racial discrimination. Will total poverty fall?
 Case answer: Yes.
 Generic answer: No. Poverty will only be redistributed.
 Example #2: Suppose we give poor people effective skill
training and compensatory education. Will total poverty
fall?
 Case answer: Yes.
 Generic answer: No. Poverty will only be redistributed
 B. What can you do about poverty?
 1. If case theories are correct: Address the
individual cause of poverty. For example, if
poverty is caused by inadequate skills or
education, then the solution is skill training or
compensatory education. If poverty is caused
by discrimination, then the solution is
antidiscrimination policies.
 2. If generic theories are correct: Improve the
quantity and quality of jobs.
 C. How can you tell which is correct--case or generic theories?
 1. Remember that the things that cause poverty in case theories
explain its distribution in generic theories. Because of this, both
theories are consistent with the same facts (statistics). Therefore, it is
very difficult, maybe impossible, to determine which is correct
through direct test.
 2. There's some indirect evidence pointing to generic theories: For
example, there is the failure of poverty to fall during periods of large
training programs, and the failure of poverty to fall with rise in
general educational level of population. Further indirect evidence
later on in the course.
 3. Most people assume case theories are correct. Why?
 Micro experience (fallacy of composition -- assuming that what's true
of the part must be true of the whole).
 Poverty scholars study the poor instead of the economy.
 Antipoverty policy would be too hard (expensive) if generic theories
were true.
 Blaming the victim.
 A desire to help the poor. (P.S. If generic theories are true, how can
you help the poor?)