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.