Abstract
Over the last decade, there has been increasing recognition of the value of understanding the lives of people throughout the world who experience impoverishment. ‘Bottom of the pyramid’ is the term used to describe people living in absolute poverty who, despite economic limitations, can be ‘resilient entrepreneurs’ and co-creators of new market opportunities that result in win-win situations for companies and consumers (Prahalad, 2004: 3). A range of metrics are used to define and describe people living in poverty, and although these metrics help identify the neediest across the world, such measures exclude people living in developed nations where poverty exists on a large scale, but where welfare policy provides a safety net. In this essay, we discuss some of the issues for those living in poverty in both developed and developing countries and argue that this will lead to a deeper understanding of the consumption experiences of those living in poverty.
The World Resources Institute (2007) defines bottom of the pyramid (BOP) as those with under $3000 in annual local purchasing power, which comprises 4b people around the world. Others define BOP as those living on less than $2 a day, covering nearly half the world’s population (Martin and Hill, 2012). While these measures are useful for identifying the neediest across the world, such empirical measures exclude people living in developed nations where poverty exists on a large scale. More holistic ways of thinking about poverty rely on relative definitions (Townsend, 1979), where the focus is on ‘poor living’, that occurs alongside the shortage of income (Blocker et al., 2012; Sen, 1999). Terms such as ‘in-work poverty’ (Spencer, 2008) and ‘nouveaux pauvres’ (Ulver-Sneistrup and Ostberg, 2011) have emerged to refer to those on very low incomes, struggling to survive in contemporary material world. In the United Kingdom, for example, there are 2.68m people who are unemployed and also 1.3m people working part-time, who are unable to find full-time employment (Harkness et al., 2012). Impoverished people living in developing and developed countries both share a difficulty in fulfilling the consumption needs of a minimally decent life (Hill, 2001; Sen, 1999) and in this sense, share a felt sense of deprivation (Blocker et al., 2012).
Clearly, poverty is a global concern and millions of consumers around the world suffer its negative consequences. From the relative perspective, poverty is understood as a dynamic concept that is measured at a particular point in time with reference to the minimal living standards that are accepted in the society for general health and well-being (Becker, 1997). The restrictions faced by poor people are myriad and can be felt in multiple ways including restricted choice, often of poorer quality products and services, reduced consumption capabilities and capacity, adverse marketplace forces and negative effects (and pressures) of consumer culture (Blocker et al., 2012; WRI, 2007). Less empowered consumers face imbalances in marketplace exchanges (Alwitt, 1995), but are often satisfied even with very poor value exchanges (see e.g. Lacko et al., 2002). Bertrand et al. (2006) argue that while all consumers potentially may face difficulties in the marketplace, for poor consumers, ‘there are narrow margins for error, and the same behaviours often manifest themselves in more pronounced ways and can lead to worse outcomes’ (Bertrand et al., 2006: 8).
Responses to poverty experiences have been variously described by consumer researchers, but here, we consider three key aspects of the lived experience of consumption poverty (building on Blocker et al., 2012).
Consumer culture, stigma and stress
Research has revealed low-income families in the United Kingdom encounter daily struggles in meeting their needs, have limited social lives and have to cope with peer pressure and stigmatisation (Hamilton, 2012). This has also been recognised by charitable organisations, for example, an investigation by United Nations Children's Fund (UNICEF, 2007) concluded childhood well-being in the United Kingdom is the lowest amongst 21 developed countries. Similarly, Save the Children, an international aid charity has launched its first domestic fundraising appeal with the slogan ‘It Shouldn’t Happen Here’ to support the 3.5 million children living in poverty in the United Kingdom. The feelings of stigma are amplified through the prominence of consumer culture and its messages around abundance.
Leveraging other forms of capital
For poor people living in consumer culture, a real issue emerges in relation to coping with limited economic resources. Various studies of low-income consumers have found that social capital is an important resource to improve quality of life, a rich source of support, information and guidance (Hill and Stephens, 1997) and a way to help navigate the welfare system (Hill, 2001). In this sense, social capital is leveraged in ways that facilitate productive engagement with marketplace (commercial and non-commercial) institutions. Other impoverished consumers seek to compensate for limited income by enhancing their cultural capital, particularly through education, to build self-esteem and improve future opportunities (Hamilton, 2005). Similarly, Piacentini et al. (forthcoming) provide evidence of impoverished young people drawing on past complaining successes (a form of cultural capital) as a way of building confidence to approach difficult marketplace encounters.
Facilitating creativity/entrepreneurial activity
Entrepreneurial activity has been suggested as a pathway out of poverty (Prahalad, 2004). However, there may also be increased likelihood of engagement with dysfunctional entrepreneurial activities such as illicit income from informal work and illegal activities (Hill and Stephens, 1997). Furthermore, Varman et al. (2012) found that while initiatives aimed at facilitating entrepreneurial activity benefited the relatively more privileged members of a farming community, as the state reducing its role (intervention), smaller scale farmers felt even more economic marginalisation. A major risk of the BOP perspective is therefore the way poverty is ‘reconceptualised as a problem that can be solved by market mechanism’ and consequently the underlying causes of poverty remain unaddressed (Schwittay, 2011: S73).
Those at the bottom of the social scale face a life characterised by restricted resource bases, and ultimately are severely constrained in their consumption lives. While much research focuses on subsistence or BOP markets in developing countries, we have argued here that it is important and relevant to examine the consumption experiences of those living in poverty in developed countries too. While governments and institutions seek ways to intervene to alleviate poverty, there may also be a danger of continued cycles of poverty (Varman et al., 2012), especially for those lacking in the entrepreneurial confidence and skills to engage with the initiative. From studies of health inequalities, the term ‘deprivation amplification’ (Macintyre, 2007) has been used to capture the idea that choices and decisions may act to magnify and reinforce the culture of poverty individuals, families and communities face. We hope this essay has inspired others to consider the terms used here and stimulated research and theory development around consumers living in poverty.