Why Do the Poor Pay More? Exploring the Poverty Penalty Concept

Journal of International Development, Vol. 23, No. 1, pp. 1-28, 2011

Posted: 17 Jan 2011

See all articles by Ronald U. Mendoza

Ronald U. Mendoza

Ateneo De Manila University - Ateneo School of Government

Date Written: January 1, 2011

Abstract

The poverty penalty refers to the relatively higher cost shouldered by the poor, when compared to the non-poor, in their participation in certain markets. By trying to further develop this concept, this paper clarifies some of the subtle and more direct ways through which the poor could be marginalised in the market system. A brief review of the business and economics literature suggests that there are different possible causes behind various forms of the poverty penalty, and hence distinct ways to address them, depending on its form, the nature of the market under analysis, the specific country context, the characteristics of the poor themselves and the prevalence of market failures among other factors.

Keywords: information, Poverty Penalty, Market Failure, Catastrophic Health Spending

Suggested Citation

Mendoza, Ronald U., Why Do the Poor Pay More? Exploring the Poverty Penalty Concept (January 1, 2011). Journal of International Development, Vol. 23, No. 1, pp. 1-28, 2011. Available at SSRN: https://ssrn.com/abstract=1741826

Ronald U. Mendoza (Contact Author)

Ateneo De Manila University - Ateneo School of Government ( email )

Katipunan Road
Loyola Heights
Quezon City, 1108
Philippines

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