Trust may be one of the biggest mysteries in the history of mankind. Can you rely on your comrade while hunting an animal 10.000 B.C? Is your friend willing to pay back your five bucks in 2016? The degree of trust is crucial to every relationship between human beings and therefore could be one of … Continue reading

The Role of Peer Effects on Households Consumption and Finance

Peer Effects on Households Consumption The basic idea of peer income’s influence on households’ consumption was first constructed by Duesenberry (1949) in his book about relative income hypothesis. According to this theory, households with below average income do not have the incentives to keep more savings. Instead, they tend to spend a larger proportion of … Continue reading The Role of Peer Effects on Households Consumption and Finance

Does Relative Poverty lead to sub-optimal career decisions?

Poverty as it is known has been defined as the state of living in perpetual scarcity and is classified into Absolute and Relative poverty. Relative poverty is a poverty standard which varies across different countries, the threshold on which it is measured differs from one society or country to the next. Regardless of the societal … Continue reading Does Relative Poverty lead to sub-optimal career decisions?

Can Nudges Help to Overcome the Obstacles of Saving Money in Developing Countries?

For a very long time, governments all over the world try to cope with poverty. Over the past 50 years, $2.3 trillion have been spent on aid, but poverty is still an important issue. Hence, the upcoming question is: What are initiators of these programs missing? What could help to improve existing programs? In 2011, … Continue reading Can Nudges Help to Overcome the Obstacles of Saving Money in Developing Countries?

Individual vs. Collective Interest of Biodiversity Conservation

  (Source: http://www.e-ir.info/wp-content/uploads/2015/02/Rainforest-Action-Network.jpg) ‘Rate of environmental degradation puts life on Earth at risk’, ‘Loss of monkeys and birds in tropical forests driving up carbon emissions’, ‘Arctic sea ice fell to record low for May’, ‘Ecuador drills for oil on edge of pristine rainforest’ – these are only some examples of headings taken from The Guardian … Continue reading Individual vs. Collective Interest of Biodiversity Conservation

Institutional Imperatives of Poverty Reduction in Pakistan

He who is without empathy for the suffering of others, has no right to be called human. [Jalal-ud-Din Rumi, 1207-73] Inflation in food prices over the past few years has pushed 11 million people into a state of hunger and poverty. In the recent dilemma, if no policy actions are taken, an additional 22 million … Continue reading Institutional Imperatives of Poverty Reduction in Pakistan