Poor Economics

What is this book about?

Banerjee and Duflo use randomized controlled trials to study how poor people actually decide — why their choices about food, schooling, health care, and saving can look irrational — and argue that anti-poverty policy should follow specific evidence rather than grand theory.

Why read it?

It demonstrates a method: breaking the grand debate over “poverty traps” into specific questions that can be tested experimentally. That approach reshaped development economics and offers a model for replacing conviction with evidence.

Core Ideas

• The choices poor people make often have their own logic under their constraints; what looks irrational to an outsider needs re-explanation.
• Small, testable interventions — deworming, vaccination reminders, savings account design — often outperform large policy slogans.
• Expectations and beliefs shape behaviour, so the design of information and incentives matters a great deal.
• Randomized trials answer whether an intervention works, but extrapolating to other settings still requires care.

What questions does this book try to answer?

• Why do the choices of poor people so often diverge from what outsiders expect?
• Which specific interventions have evidence behind them?

Who should read it?

For readers interested in development policy and social interventions; basic statistical literacy helps with the experimental designs.