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Understanding Poverty$
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Abhijit Vinayak Banerjee, Roland Bénabou, and Dilip Mookherjee

Print publication date: 2006

Print ISBN-13: 9780195305197

Published to Oxford Scholarship Online: September 2006

DOI: 10.1093/0195305191.001.0001

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Better Choices to Reduce Poverty

Better Choices to Reduce Poverty

(p.379) 25 Better Choices to Reduce Poverty
Understanding Poverty

Sendhil Mullainathan

Oxford University Press

A growing number of researchers are studying how to integrate psychological insights into economic reasoning. In this perspective, people sometimes make bad choices, ones that they themselves would like to improve on. This perspective is opening up new ideas, such as how good institutions might help people improve their decisions. This essay discusses these insights using a few choice examples. The goal is to provide a glimpse of how radically different policy suggestions might be in 10 or 20 years as the integration of psychology and economics deepens.

Keywords:   development economics, active choices, passive choices, developing countries, psychological insight, psychology, economic reasoning

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