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1. Read Study Guide for Poor Economics Chapters 5-6

Each guide I will write up a study guide for the key points you should learn in the assigned reading. I recommend that you read the study guide before reading the chapters

Study Guide

Chapter 5 Pak Sudarno’s Big Family

1. Understand how India’s sterilization experiment was ineffective.

2. Be able to explain how high fertility could be consistent with an S-shaped poverty trap. Look at examples from China and Bangladesh

3. What evidence is there for and against that the poor control their own fertility decisions?

4. Understand according to Duflo’s test in Kenya what are effective ways of fighting teenage pregnancy.

5. Be able to explain how children act as a financial investment.

6. Understand the evidence from Udry in Coate d’Ivoire and Indonesian family how a family might not act as a single unit. How might a development program like PROGRESA take advantage of this.

Chapter 6 Barefoot-Hedge Fund Managers

7. Be able to apply the example of Ibu Tina to a poverty trap and how a shock might cause a family to lose more than the initial loss.

8. Understand why a bad break of the same magnitude would hurt the poor worse than those in rich countries.

9. Understand why working more during a shock is not a good strategy and the type of strategy the poor typically use instead.

10. Be able to explain why depending on others in your community is not a perfect coping mechanism.

11. Understand the concept of adverse selection and moral hazard and how it limits insurance in developing countries.

12. Understand the force that prevent micro-insurance from taking off.

Read Poor Economics Chapters 5-6

Discussion 4: First Post March 26 Second March 27

Your response should be one paragraph. Students will receive 2 points for addressing each of the relevant info which is marked by a **

Note for this discussion you will choose one of three topics: Health (Chapter 3) Education (Chapter 4) or Fertility (Chapter 5).

Also you might want to read the instructions for Paper 2 before doing this assignment you are free to use the same text you submit for discussion as part of your paper.

First Post (8 possible Points): Describe why those living on less than $2 a day are more vulnerable to risk than those who make more money** For your chosen topic and chapter (Health, Education or Fertility) describe how risk factors into the decision for the relevant outcome measures (e.g. Health, Education or Fertility)**. Discuss how the decision on your relevant factor could lead to a poverty trap.** Find a relevant development program that attempts to address to improve this outcome and discuss briefly how it works [The Poor Economics book website (https://www.povertyactionlab.org/evidence-to-polic…/) should be very helpful].** (The program need not be in your chosen country. )

Response Post (2 possible Points): Describe briefly how your outcome measure may relate to another member in your groups discussion. For example if you are assigned education describe how schooling relates to health in terms of your group members discussion on health.

https://www.povertyactionlab.org/evidence-to-policy