Poverty penalty

The poverty penalty describes the phenomenon that poor people tend to pay more to eat, buy, and borrow than the rich. The term became widely known through a 2005 book by C. K. Prahalad, The Fortune at the Bottom of the Pyramid.[1] An earlier exploration of this was a 1960s sociology study published as The Poor Pay More which examined the ways in which retail patterns and a lack of consumer options allowed marginal retailers such as door-to-door salesmen, "easy credit" storefronts and the sale of installment credit agreements to extract profits from low-income buyers, with fewer options and less sophisticated consumer habits.[2]

The impact of the poverty penalty phenomenon has been observed across a range of products and services, including energy[3] and insurance.[4]

## See also

* Cost of poverty
* Extreme poverty
* Poverty reduction
* Progress and Poverty

The factors causing poverty and suffering

## References

1. ↑ Prahalad, C. K. (2004). The fortune at the bottom of the pyramid (2. print. ed.). Upper Saddle River, NJ: Wharton School Publ.. ISBN 0-13-146750-6.
2. ↑ Caplovitz, David (1967). The poor pay more : consumer practices of low-income families (1st Free Press pbk. ed.). New York: Free Press. ISBN 0-02-905250-5.
3. ↑ "Energy and the poverty premium" (in en-US). 19 Jan 2017. https://fairbydesign.com/energypovertypremium/.
4. ↑ "New Zealand's insurance poverty premium - Banked NZ" (in en-US). 26 April 2023. https://www.banked.co.nz/new-zealands-insurance-poverty-premium.

## External links

* Brown, DeNeen L (18 May 2009). "The High Cost of Poverty: Why the Poor Pay More". Washington Post. https://www.washingtonpost.com/wp-dyn/content/article/2009/05/17/AR2009051702053.html?sid=ST2009051801162.

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