How the poor live

From
Stumbling and Mumbling

What exactly does it mean to live on a dollar a day? Here's a fascinating
paper that tells us, by drawing on evidence from 13 countries. Some highlights:

1. "The average person living at under $1 a day does not seem to put every available penny into buying more calories...Food typically represents from 56 to 78% [of household spending]."
Despite this, hunger is common. Among the extremely poor in Udaipur, only 57% said their household had enough to eat in the previous year, and 72% report at least one symptom of disease.
2. "The poor generally do not compain about their health - but then they do not complain about life in general. While the poor certainly feel poor, their levels of self-reported happiness or health are not particularly low."
3. Spending on festivals - religious ceremonies, funerals and weddings - is high. In Udaipur, median spending on these by people living on $1 a day was 10% of income.
4. In several countries, the extremely poor spend about 5% of income on alcohol and tobacco.
5. In the Ivory Coast, 14% of people on $1 a day have a TV - and 45% of those on $2 a day have one.
6. Many of the extremely poor get income from more than one source. Cultivating their own land is not always the main source of income.
7. Participation in microfinance is not as high as you'd think. The poor seem unable to reap economies of scale, therefore.

An excerpt from the paper (which tallies with some of my observations):

Walking down the main street of the biggest slum in the medium sized Southern Indian
city of Guntur at nine in the morning, the first thing one notices are the eateries: In front of every sixth house that directly faced the road, by our count, there was a woman sitting behind a little kerosene stove with a round cast-iron griddle roasting on it. Every few minutes someone would walk up to her and order a dosa, the rice and beans pancakes that almost everyone eats for breakfast in South India. She would throw a cupful of the batter on the griddle, swirl it around to cover almost the entire surface and drizzle some oil around the edges. A minute or two later, she would slide an off-white pock-marked pancake off the griddle, douse it in some sauce, fold it in a newspaper or a banana leaf and hand it to her client, in return for a rupee.
When we walked back down that same street an hour later, the women were gone. We
found one inside her house, filling her daughter’s plate with lunch that she had cooked while making the dosas. She told us that later that day, she was going out to vend her saris, the long piece of decorative cloth that Indian women drape around themselves. She gets plain nylon saris from the shop and stitches beads and small shiny pieces on them, and once a week, she takes them from house to house, hoping that women would buy them to wear on special occasions. And they do buy them, she said confidently. All the other dosa women we met that day had a similar story: once they are done frying dosas, they do something else. Some collect trash; others make pickles to sell; others work as laborers.

At somewhat higher income levels, I have seen similar things. Women folk bringing sarees from cities and traveling round villages selling them to augment husbands' salaries.
There is also a discussion of the above paper of Abhijit Banerjee and Esther Duflo in
MR