Conflicting Measures of Poverty and Inadequate Saving by the Poor – The Role of Status Driven Utility Function

Marjit, Sugata and Roy, Ranjan (2010): Conflicting Measures of Poverty and Inadequate Saving by the Poor – The Role of Status Driven Utility Function.

Abstract

In presence of inequality a status driven utility function reconciles the conflict between income based and nutrition based measures of poverty. Moreover, it can explain why the poor tend to save less, an established empirical fact in the developing countries. The result is independent of the assumption of imperfect capital market. The paper attempts to integrate various strands of literature on status effects.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inequality, Inter-temporal consumer choice, Utility, Poverty,
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory; D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty

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