The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer
What has come to be known as the poverty penalty – the additional cost paid for goods and services by the poor relative to the more affluent – is a familiar mechanism in emerging countries. For profoundly different reasons, however, poor people in developed countries also suffer from the poverty pen...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Institut Veolia Environnement
2012-06-01
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| Series: | Field Actions Science Reports |
| Subjects: | |
| Online Access: | http://journals.openedition.org/factsreports/1537 |
| _version_ | 1811274697649684480 |
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| author | Frédéric Dalsace Charles-Edouard Vincent Jacques Berger François Dalens |
| author_facet | Frédéric Dalsace Charles-Edouard Vincent Jacques Berger François Dalens |
| author_sort | Frédéric Dalsace |
| collection | DOAJ |
| description | What has come to be known as the poverty penalty – the additional cost paid for goods and services by the poor relative to the more affluent – is a familiar mechanism in emerging countries. For profoundly different reasons, however, poor people in developed countries also suffer from the poverty penalty. Quite naturally, without any particular ill will on the part of the actors in the commercial sector, the market sometimes penalizes the poor by making them pay more than other households, per unit of consumption, for the same goods and services. Drawing on a study by the Boston Consulting Group conducted at the request of the action tank “Entreprises et Pauvreté”, this paper sets out to quantify a part of the poverty penalty. The economic impact is far from incidental, as it represents, at the very least, a “double jeopardy” of an extra 2.5% of the total budget for low-income households, or some €500 –more than a month’s worth of “discretionary” spending. The paper sheds light on the various underlying mechanisms that contribute to the creation of the poverty penalty. These “undesirable side-effects” of the market are of five types: • An unfavorable cost structure • An unfavorable price structure • The law of supply and demand • A lack of equipment or an unfavorable risk profile • Insufficient objectivity to deal with scarce, imperfect or missing information. The ultimate aim is to favor the development of compensation or annulment solutions through “positive discrimination” actions implemented by businesses; experiments currently under way offer some hope in the fight against the poverty penalty. |
| first_indexed | 2024-04-12T23:23:38Z |
| format | Article |
| id | doaj.art-476e7a4ca4de4436a113b961439c82b0 |
| institution | Directory Open Access Journal |
| issn | 1867-139X 1867-8521 |
| language | English |
| last_indexed | 2024-04-12T23:23:38Z |
| publishDate | 2012-06-01 |
| publisher | Institut Veolia Environnement |
| record_format | Article |
| series | Field Actions Science Reports |
| spelling | doaj.art-476e7a4ca4de4436a113b961439c82b02022-12-22T03:12:28ZengInstitut Veolia EnvironnementField Actions Science Reports1867-139X1867-85212012-06-01The Poverty Penalty in France: How the Market Makes Low-Income Populations PoorerFrédéric DalsaceCharles-Edouard VincentJacques BergerFrançois DalensWhat has come to be known as the poverty penalty – the additional cost paid for goods and services by the poor relative to the more affluent – is a familiar mechanism in emerging countries. For profoundly different reasons, however, poor people in developed countries also suffer from the poverty penalty. Quite naturally, without any particular ill will on the part of the actors in the commercial sector, the market sometimes penalizes the poor by making them pay more than other households, per unit of consumption, for the same goods and services. Drawing on a study by the Boston Consulting Group conducted at the request of the action tank “Entreprises et Pauvreté”, this paper sets out to quantify a part of the poverty penalty. The economic impact is far from incidental, as it represents, at the very least, a “double jeopardy” of an extra 2.5% of the total budget for low-income households, or some €500 –more than a month’s worth of “discretionary” spending. The paper sheds light on the various underlying mechanisms that contribute to the creation of the poverty penalty. These “undesirable side-effects” of the market are of five types: • An unfavorable cost structure • An unfavorable price structure • The law of supply and demand • A lack of equipment or an unfavorable risk profile • Insufficient objectivity to deal with scarce, imperfect or missing information. The ultimate aim is to favor the development of compensation or annulment solutions through “positive discrimination” actions implemented by businesses; experiments currently under way offer some hope in the fight against the poverty penalty.http://journals.openedition.org/factsreports/1537double jeopardypoverty in developed countriespoverty penaltysocial business |
| spellingShingle | Frédéric Dalsace Charles-Edouard Vincent Jacques Berger François Dalens The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer Field Actions Science Reports double jeopardy poverty in developed countries poverty penalty social business |
| title | The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer |
| title_full | The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer |
| title_fullStr | The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer |
| title_full_unstemmed | The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer |
| title_short | The Poverty Penalty in France: How the Market Makes Low-Income Populations Poorer |
| title_sort | poverty penalty in france how the market makes low income populations poorer |
| topic | double jeopardy poverty in developed countries poverty penalty social business |
| url | http://journals.openedition.org/factsreports/1537 |
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