One-Time Investments Reduce Poverty for 10 Years

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A study by researchers from the Massachusetts Institute of Technology (MIT) reveals that providing a one-time economic boost to people in poverty can lead to long-term improvements in their lives. The study focused on a program in West Bengal, India, targeting individuals in extreme poverty. Launched in 2007, the initiative gave 266 households the option of receiving farm animals (cows or goats) or inventory for small businesses. Additionally, participants received a weekly allowance of about $7.60 for 30-40 weeks, along with 18 months of regular visits for health, life, and business advice.

Surveying the effects of this economic boost 18 months, three years, seven years, and 10 years after the program's initiation, researchers measured economic well-being based on spending, household incomes, food security, and health. After a decade, participating households increased their daily spending per person from $1.35 to $3.53, while non-participating households went from $1.35 to $2.90. Monthly household incomes for participants rose from $170 to $680 after 10 years, compared to an increase from $144 to $497 for non-participating households.

The study emphasized that initial income gains for participating households came from having more farm animals, enabling them to explore new income sources over time. Moreover, these households experienced reduced food insecurity and improved health. Despite a cost of approximately $2,200 per household, the program resulted in around $8,200 in benefits for each household after a decade.


1- What were the two options given to the households in the program in West Bengal, India?

2- What were the regular visits to the households for?

3- After 10 years, what was the increase in daily spending per person for participating households?


You have completed the comprehension questions. 

Parts of this lesson are based on: An article Engoo Daily News.