At the beginning of chapter 2 in "Poor Economics" the authors state that in June 2009 the Food and Agriculture Administration reported that there were one billion people suffering from hunger. What most believe to be one of the root causes of the poor not being able to provide themselves with enough to eat is the poverty trap. The poverty trap suggests that when people are unemployed or not earning enough to make ends meet, they can not afford to buy enough calories which as a result they become less productive. The people that get stuck in these "traps" usually have a very hard time getting employed because they do not acquire the strength desired to perform the tasks they would need to. The reason for the lack of strength is because these people can not earn enough money to properly feed themselves. As the chapter progresses another problem is presented, the poor people are not spending as much as they should on food which is why they are hungry. They are making poor decisions and spending money on things such as extravagancies, entertainment and festivals when they should really be spending that money on more food. Additionally, the poor choose to buy more expensive calories when they should really be buying. What these people do not understand is that they should be purchasing inexpensive food that will provide them with the amount of calories they require daily then there is no opportunity for them to be caught in the supposed poverty trap. If people are not buying the required calories that their bodies need then they are not receiving the micronutrients that their bodies need and if this persists then yes, the world will continue to obtain one billion hungry people. But what happens to children who's parents are too poor to afford food or are not properly providing their children with enough food? Banerjee and Duflo explain how many children in Southeast Asia and Sub-Sahara Africa are either malnourished or undernourished. Banerjee and Duflo elaborate and explain how children who receive the essential nutrients end up doing better in life than children who receive insufficient nutrients. There was an experiment done in where two groups of children were given deworming pills, one group received the pills for one year and the other group received the pills for two years. The results explained that the longer children receive proper care and ample nutrients then they will do better than children who do not receive enough. The group that received the deworming pills longer did better on tests, were taller, and have a better chance of reaching their productivity potential in the future. This example proves how important receiving the proper nutrients is in the early stages of childhood development. But is there really a poverty trap that actually exists? If people have the means of being able to provide themselves with the right amount of calories but are choosing to spend their money differently and making poor decisions with their personal finances then I do not believe in the poverty trap. On the contrary the poverty trap may exist but to not as many people as we actually think.
The poverty trap is an idea that is defined in the following way: When an extremely poor person is either unemployed or receiving very little income that prevents them from being able to buy themselves the essential calories they need to be as productive as they can at work. The trap comes into play when the person can not find employment because they have been eating so few calories that they become an unattractive candidate to the employer because they do not have the amount of strength to perform in a work setting. But people in India reported last year that they did have enough food to eat, so does the poverty trap really exist? I believe that the poverty trap exists to some extent, I do think that there are people in the world that have the burning desire to work and want to earn enough money to provide themselves with the required calories. But on the other hand I think there is a larger group of people that are believed to be caught in this poverty trap but in reality they are making poor financial decisions. For example, saving for weddings, funerals, buying appliances used purely for entertainment or buying more expensive foods. If everyone was frugal with their money and made the smart investment choices then there would not be one billion starving people. It comes down to quantity not quality. Why do people make these poor decisions? Is it because they want to indulge and treat themselves?
