Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economics and Planning Unit (EPU-Delhi)


Ray, Tridip (EPU-Delhi; ISI)

Abstract (Summary of the Work)

The key idea explored in this thesis is the following: though being poor in itself is a huge disadvantage, the situation might be influenced considerably by the type of neighbourhood the poor lives in as private establishments like educational institutions, health care facilities or credit institutions take both the location and income mix of people into account while making strategic decisions like whether to enter into the neighbourhood at all, and, upon entry, what price and quality to choose for their products and services. Is staying with the rich a virtue for the poor or a source of resentment? Are the poor living in poor neighborhoods better-off because living in an affluent one costs too much? Or are they significantly worse-off as they do not even have access to many basic facilities? These are the kinds of questions we are interested in exploring in this thesis.A casual walk across the city streets of any developing country might suffice to illustrate the idea. While moving across poor neighborhoods one comes across many roadside vendors selling tea, providing barber services and so on from shops requiring minimal physical investment and, understandably, the quality on offer is quite basic. As one moves into relatively richer neighbourhoods, one is bound to come across more sophisticated counterparts of the same products and services: road side vendors are replaced by air-conditioned cafes, shining beauty salons and so on. Similar products and services could become heavily capital intensive and highly specialized in nature depending on the income mix of the neighbourhood. Changes in price of course reflect these changes in quality level. Given these differences in price and quality, which neighbourhood does an individual prefer to be in? Answer to this depends not just on the cost relative to income, but also on the ease of access of the facilities. This is because certain goods and services are required at regular intervals so that distance becomes an important factor. In the less developed countries distance from schools is an important factor leading to high drop-out rates. Simlarly distance from the nearby health care facility is a major reason resulting in higher mortality of both mother and child during child birth in rural areas of developing countries. How readily a product or service is available is thus determined by the neighborhood an individual lives in. So it is the interaction of the two, the individual’s income and his postcode, that determines his welfare. This thesis attempts to capture this interaction by developing simple models that integrate consumer’s income distribution with spatial distribution and explores the consequences of an increase in income inequality on the welfare of the poor in general, and their access to market in particular.There is a substantial body of evidence showing how neighborhood poverty affects poor people’s ability to access facilities such as health care and schooling. Consider health care first. Montgomery et al. (2005) find that both household and neighborhood living standards can make a significantly important difference to health.


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Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.


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