Research on Anti-Poverty in Behavioral Economics

Abstract

Nowadays, poverty is still a prominent problem in economic and social development in China. For a long time, scholars have mainly solved the problem of poverty from the perspective of standard economics, which focuses on material giving, yet neglects changing the mind of the poor. At present, the poverty alleviation is not only with high cost, but the effect is not sustainable in China. In a word, it can’t solve the problem of poverty in nature. Dealing with the problem of poverty from the perspective of Behavioral Economics, which emphasizes that helping the poor to change the mind should be put in the first place to achieve the effective change in the behavior and long-term concept of the poor. Using CAVE method to analyze the anti-poverty experience of the villagers living in 18-hole village in Huayuan County of Hunan Province, we can change the poor’s mind by transferring their reference points under the prospect thoery to help the poverty alleviation. This study will provide a new approach to the promotion of poverty alleviation based on behavioral economics in China.