Naimil Shah: Why poor people buy TVs

If we take a close look at the lifestyle of poor people one can figure out that their spending is not very counter-intuitive. Every human tries to maximize happiness in his life with whatever resources he has. It is very clear that the things which make life less boring are a priority for the poor as well. This may be a television, a family function?—?or just a cup of sugary tea and pakoras ( Indian fritters made with gram flour).

Consequently the poor choose their food not mainly for the nutritional value but how good it tastes. One would always be willing to substitute dull wholesome food for tasty & spicy food which when availed at a cheap cost will mostly have a low calorific value. Let’s take one example of a case that happened in China. In a few regions randomly selected poor households were given a large subsidy on the price of their basic staple. We expect that as the price of something went down it should have been consumed more but the opposite of it actually happened. Households that received a subsidy for wheat and rice consumed less of this two items and ate more of shrimp and meat even though their staples cost less now. Remarkably their calorie intake also didn’t increase. One likely explanation for this is that since the staples formed majority of their diet, a decrease in its price left the household richer and they chose to buy more expensive food.

If the consumption of staple is associated with being poor , feeling richer might have actually made them consume less of it. The bottom line is when given a chance people will always shift to more pleasurable food.

From: Why poor people buy TVs – Medium

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25 thoughts on “Naimil Shah: Why poor people buy TVs

  1. This isn’t a particular novel interpretation or explanation. People noticed this since the 19th century. Gabriel and Saul will point out that George Orwell had a very elegant passage about this in the Road to Wigan Pier.

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  2. This is completely unsurprising. Heck middle class people buy stuff they can’t afford that well because it makes them happy or is just fun. Most of us know that just fine. Talking about this with “poor people” shouldn’t change that at all.

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  3. “Remarkably their calorie intake also didn’t increase. One likely explanation for this is that since the staples formed majority of their diet, a decrease in its price left the household richer and they chose to buy more expensive food.”

    Why is this being presented as “OMG SHOCKING”? Isn’t the idea behind all these soda taxes that poor people are too fat and shouldn’t eat as many calories as they already do?

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  4. Add me to the pile of “this is utterly unsurprising.”

    I’m pretty solidly middle-class (maybe even upper middle class, given the economically depressed area in which I live), and I spend money in ways outsiders would see as “foolish.” But life is hard and life is short and if, for example, buying a reproduction of a toy I had as a child makes that life seem a little less hard, I’m gonna do it. Or buying a new dress I don’t “need.” Or buying books I might be able to check out of the library for free.

    And the food thing, also: there’s only so much broiled chicken and steamed vegetables a person can take, even if they were the cheapest food available.

    I’ve never seen evidence that a deficit of pleasure is life-shortening, but I wouldn’t be surprised if that were found to be a factor at some point.

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    • “I’ve never seen evidence that a deficit of pleasure is life-shortening,”

      Frankly, it doesn’t matter if it is true on not. Lack of pleasure makes life UNPLEASANT. Why do you think mankind’s history is one of ingesting things that alter reality/give pleasure? Anything you can do to escape the drudgery is desired: food, drugs, sex….

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      • Given there is a solid strain of “poverty as the result of sin” thought in America (that is, if you are poor, it is because you deserve it do to being insufficiently moral), the unpleasantness of poverty is something of a plus.

        It’s punishment for your sins.

        So having those pleasures, any pleasure to offset that unpleasantness, is avoiding your punishment — you won’t learn to straighten up, work hard, etc.

        That vibe is most easily seen when it comes to food stamp programs and some of the responses.

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  5. On an episode the Netflix show Sense8, one of the main characters, Kala, is visiting another, Capheus, who lives in a ramshackle hut in Nairobi. She notes the 42″ flatscreen on his wall and says that she saw similar televisions in slums in her hometown of Mumbai, in houses so poor they didn’t have a bed. She asks him why someone would by a flatscreen before a bed or other more foundational comforts. He replies, “The bed keeps you in the slum. The flat screen takes you out.”

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  6. A decent TV costs, what, $600?

    Hell… not even!

    Add in a cable package and electricity and that is probably $80 more a month. Now what do you get out of that? Hours and hours of entertainment. And think of the opportunity cost of not having it! “The game’s on? Go to the bar, order dinner and drinks, drop $50.” “I’m bored… let’s go to a movie… grab a couple of 20s.”

    I’ve also heard that — in developing countries — television can make a profound difference in the educational attainment of women primarily by showing them a world and lifestyle other than their own and empowering them to seek more than they might otherwise believe was possible.

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    • There’s also the issue of “hey, I don’t need this one anymore… you want it?”

      We upgraded our television a few years back and the old television went to a friend for the price of “if you take it out of my basement, you can have it”.

      This upgraded our friend’s television for the price of a couple hours on a Saturday.

      I have no doubt that this dynamic happens all over with every new-fangled television that comes out. The 75″ television replaces the 65″ television… hey, you want my 65″ tv to replace your old 52″ one? The 52″ one goes to a friend who only has a 40″, the 40″ goes to the nephew who just moved out.

      People visit the nephew and see that he has a 40″ television… despite only being an assistant manager at Fashion Bug.

      People start judging the nephew and judging him hard.
      When, really, he just lucked out because some other guy bought a 75″ and stuff cascaded from there.

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  7. In a few regions randomly selected poor households were given a large subsidy on the price of their basic staple. We expect that as the price of something went down it should have been consumed more but the opposite of it actually happened. Households that received a subsidy for wheat and rice consumed less of this two items and ate more of shrimp and meat even though their staples cost less now. Remarkably their calorie intake also didn’t increase.

    Is that experimental confirmation of the hypothesized Giffen good?

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