The psychology of poverty
To Johannes Haushofer, studying Western college students to understand economic decision-making more clearly will only take economists so far. Sooner or later, those who want to grasp one of the world’s largest economic problems — the plight of the global poor — are going to have to talk to some poor people. That’s why Haushofer has opened the Busara Center for Behavioral Economics. Located in Nairobi, Kenya, near the sprawling Kibera slum, the nearly year-old center’s mission is to provide researchers from around the world with a facility on a par with behavioral economics labs in developed countries, but with access to Kibera’s residents. The center, which has a permanent staff of five, is equipped with 20 touchscreen computers that allow experiments with those who either are unfamiliar with such technology or are illiterate. The center has conducted several recruiting drives in Kibera and has a pool of 2,000 subjects willing to...