“Double jeopardy”: how the market penalizes the poorest

Based on an interview with Frédéric Dalsace, his presentation at the “How can companies contribute to the challenge of sustainable development?” conference held at HEC Paris on June 21, 2012 and the article “Les pénalités de pauvreté en France: comment le marché aggrave la situation des populations pauvres” by Frédéric Dalsace, Charles-Edouard Vincent, Jacques Berger and François Dalens (Special Issue No. 4 of FACTS Reports, January 2012, published by the Institut Veolia Environnement).

Frédéric Dalsace

Poor households, already subject to severe financial constraints, suffer further collateral damage because goods and services are not designed for them. This creates conditions in which the poor end up paying proportionally higher prices for their purchases compared to other members of society. Faced with this reality, certain businesses are developing special programs that cater to low-income groups, with results indicating that such schemes can be a rich source of opportunity.

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Frédéric Dalsace, Charles-Edouard Vincent, Jacques Berger and François Dalens analyzed the budgets of poor households (the lowest income decile) and discovered that what might be termed “essential” expenditure — rent, taxes, loans, insurance and housing costs — is equal to 31% of their income. The money that is left for families to live on once these bills have been paid can be divided into two other types of expenditure: “necessary” expenses — food, transport, phone, health, education and financial services — representing 40% of household budgets; and “discretionary” expenses, such as clothes, household items, leisure activities, etc. On average, poor households of 2.2 people are left with only €420 a month to pay for clothes, furniture, leisure activities, etc. In addition, the market has adverse side effects: the “poverty penalty” that the goods and services that poor households do purchase are not designed for them.[read more]

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Public health: How to encourage people to have a healthier lifestyle

Published in research@HEC, no 28, August- September, a journal that has been promoting the research of HEC Paris professors since 2007.
Based on an interview with Frédéric Dalsace, his presentation at the “How can companies contribute to the challenge of sustainable development?” conference held at HEC Paris on June 21, 2012.