In an earlier article in this series about the findings of a daily ‘financial diary’ research project in Bangladesh, we looked at the spending patterns of households (“What do poor households spend their money on?”). Here, we zoom in on their biggest expenditures, using daily data for 40 ‘core’ diarists for the period from mid May 2015 to end July 2017.

We begin with a chart that sets out, for each diarist, their single biggest expenditure during the whole of the time we have been tracking them.

As a way of checking how unusual these biggest-of-all expenditures are for the households, we show the average value of their ten biggest expenditures: in some cases (17, 23, 33 and 37 notably) we see that the biggest ever expenditure was several times bigger than other big expenditures they made.

Overall the chart shows what one would expect – the bigger expenditures are made by households with the bigger per capita incomes. Note though that the values for the poorest quartile of all (households 1 – 10) are similar to those of the next quartile up. At the extreme left of the chart we see an outlier – a household with a very low per capita income whose single biggest ever expenditure over a period of almost 27 months was just $27 (on over-the-counter medicine). By contrast, household 37 once made a single expenditure worth $9,625 (for migration costs).

In this post we will look at what these big sums were spent on, and the sources that funded them. A later post will add flesh to these statistical bones through case-studies. These findings should be of use to financial service providers and anyone interested in how poor people manage their money.

You can find more at: https://blog.gdi.manchester.ac.uk/when-poor-households-spend-big/