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Economics of the Underprivileged: Starting Small to Make a Big Difference in the World

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Course DatesWeeksMeeting TimesStatusInstructor(s)CRN
June 23, 2014 - July 11, 20143M-F 12:45-3:35POpenGirija Borker10666

Course Description

To help students understand the lives of the underprivileged in developing countries and gain an understanding of the economics behind their decision making process, the focus will be on how students can contribute to the betterment of the lives of these poor. The course will provide a microeconomic perspective on the topic which will give students an insight into the field of development economics.

With over 865 million people in the world living with less than 99 cents per day, it is imperative to have an understanding of the lives of these so called poor. This course aims to do just that.
The course aims to help students:
- understand the decision making process followed by the poor, based on fundamental economic principles such as choice, incentives, tradeoffs and externalities; we will do this by reviewing case studies from the insightful book Poor Economics by Abhijit Banerjee and Esther Duflo (2011)
- understand how poverty is not just the lack of income but the lack of education, health, quality of life and access to credit; we will do this by studying each of the contributory factors in detail
- introduce students to fundamental concepts in development economics such as the poverty traps, health, education, consumption, savings, credit and insurance.
- explore the reasons behind the persistence of poverty; and
- evaluate the interventions that have been tried in the past such as conditional cash transfer programs, universal health care coverage, provision of school supplies, along with the effectiveness of each intervention.

By the end of this course, students will know that:

- the poor and underprivileged are in a very different situation compared to us when making decisions about their day-to-day living, they often lack critical pieces of information and believe things that are not true which makes them not do things that we would think are "rational"
- there are good reasons why people like us need to intervene to help, for example, by giving them things for free; and
- poor countries are not doomed to failure because they are poor or because of some unfortunate history, like everywhere else, bad ideas play an important role in keeping them poor.

Required prerequisite: a background in Mathematics.

Recommended prerequisite: a background in Statistics.