Poverty and aspirations failure

Dalton, P. S., Ghosal, S., and Mani, A. (2016) Poverty and aspirations failure. Economic Journal, 126(590), pp. 165-188. (doi:10.1111/ecoj.12210)

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Abstract

We develop a theoretical framework to study the psychology of poverty and ‘aspirations failure’, defined as the failure to aspire to one's own potential. In our framework, rich and the poor persons share the same preferences and same behavioural bias in setting aspirations. We show that poverty can exacerbate the effects of this behavioural bias leading to aspirations failure and hence, a behavioural poverty trap. Aspirations failure is a consequence of poverty, rather than a cause. We specify the conditions under which raising aspirations alone is sufficient to help escape from a poverty trap, even without relaxing material constraints.

Item Type:Articles
Additional Information:Funded by: ESRC-DFID. Grant Number: RES-167-25-0364.
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Ghosal, Professor Sayantan
Authors: Dalton, P. S., Ghosal, S., and Mani, A.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economic Journal
Publisher:Wiley
ISSN:0013-0133
ISSN (Online):1468-0297
Copyright Holders:Copyright © 2016 The Authors
First Published:First published in Economic Journal 126(590):165-188
Publisher Policy:Reproduced under a Creative Commons License

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