Poor People and Risky Business


  • Documentos de trabajo


  • We try to explain why economic conflicts and illegal business often take place in poor countries. We use the concept of subsistence level of consumption (d) and assume a regular concave utility function for consumption levels higher than d. For consumption levels lower than d utility is constant and equal to zero. Under this framework poor agents are risk-lovers. This result helps to explain why economic conflicts are more likely to appear in poor economies and why poor agents are more willing to undertake illegal business.

fecha de publicación

  • 2006-10

Líneas de investigación

  • Illegal Business
  • Income Distribution
  • Poverty


  • 3356