7.07.2010

Haiti in "This American Life"

This American Life has an insightful (albeit depressing) story on some of the troubles facing economic development in Haiti.  Listen to it for free here.  I highly recommend it.

Some of the issues are related to the recent earthquake, some are not.

The statement that struck me the most was along the lines of (I'm paraphrasing):
"Haitian farmer X could get much better prices on her mangoes that she sells to the US if she took steps to prevent them from bruising. However, farmer X doesn't mind bruises on her mangoes, and she cannot even conceptualize an American consumer that is picky about bruises on her mangoes.  So farmer X does not take the simple, cheap steps prevent her mangoes from bruising."
I can't decide if I think this statement is true or not.  The idea that farmer X cannot imagine her consumer is important and interesting, but whether this information should be conveyed through price signals in her market does not seem obvious. Theory would predict that farmers should simply be offered higher prices for those mangoes she has that are less bruised, and thus she would learn that she can make more money if she doesn't let her mangoes bruise.  If this is not happening, why is that?  The inability to conceptualize her consumer does might explain why she is not proactive about preventing mango bruises before she is offered prices, but it doesn't explain why the price mechanism is failing in this instance.  Perhaps someone will do research on this problem so it can be effectively addressed.

No comments:

Post a Comment