Global Journal of Human Social Science, E: Economics, Volume 22 Issue 2

the Dharavi slum would be 53 times higher than that paid in the wealthy B. Desai Road (formerly Warden Road), in same year. This measurement refers to the need for measurement standards and units, as well as defining against which they are measured. In the example given, the proportion is a measure that makes comparable the differences between the prices paid by the poor and the rich between different pairs of similar goods. Stated in this way, the penalty of poverty is useful for Prahalad (2005) to demonstrate the viability of markets for the poor in terms of the revenue potential it represents for companies, since it uses the ratio between the price paid by the poor and the rich, as an indicator of the premium over the prices paid by the latter. From the unfolding of this proposition, the cited author bases his proposal of development based on markets aimed at the poor. This allows us to understand that the measurement and indicator of the poverty penalty used depends on the objective of the work. Thus, when comparisons are to be made, the concept must be measured and indicated in the same way, and the works compared must have the same objectives. If, however, the proportion as a unit of measurement of the poverty penalty serves as a sufficient indicator for the objective of Prahalad (2005), it also reveals a number of issues that are important for the concept of the poverty penalty. In the form of proportion, the penalty does not allow considering price variations that penalize the poor. The dilution, or increase in the penalty if measured in per capita terms , is another question that remains open with the proportion as an indicator of the poverty penalty, as well as the role of other expenses in obtaining the good, in addition to price, as well as the penalty being measured by proportion, does not reflect how much the expenditure represents in relation to the budget. Another order of problem stems from the very way in which in Prahalad (2005), markets are considered separately. Involving more than one market at the same time, poverty penalty concept would raise questions about reallocation of resources, or the impact it would have on the budget. There would also be a need to rethink the concept, to treat it, perhaps, as a net effect of the different penalties and benefits resulting from the comparisons of different markets. Thus, although Prahalad (2005) has given a name to the market's penalization of poverty, not only is the measurement he uses limited by the objective of his work, but also the meaning of the term he named is. We will open the perspective to consider different works by Prahalad (2005), from now on, that contribute with other aspects, concepts and ways of measuring the poverty penalty. This will be done from the main characterizing aspects of the concept, within each approach that involves it. Therefore, we review the characterizing aspects of the poverty penalty, which, in light of the limitations of the concept as presented in Prahalad (2005), will be used as criteria to identify contributions in the sense of what was said above. In order for poverty to be penalized, it must first be distinguished between two groups of consumers, namely: the poor and the non-poor, or rich. Then, similar products in the consumption of both must be taken for analysis and the market must be segmented between poor and rich, while different economic ecosystems, generally located in different geographic spaces. Next, the penalization of the poor due to that segmentation must be verified, in the form of worse conditions in the acquisition of the same compared goods and this must be expressed monetarily, or measured in relation to expenditures, although its measurements can be transformed into proportions, or other units of measurement to indicate the occurrence of poverty penalty. c) Contextualization of the concept in the literature and expansion of its meaning i. The origin of the meaning of poverty penalty and its treatment from the perspective of each market separately There is a certain consensus in the literature that the poverty penalty concept has its origins in the work of Caplovitz (1963). In fact, the term does not appear once in Caplovitz (1963), because it was only defined, as we saw later, in Prahalad (2005). What probably justifies that consensus is that Caplovitz's own work can be understood as being around the penalization of poverty, as is the case with the content of the definition of the poverty penalty, which appears in the title of that work and is sometimes textually described in the body of the text, such as the following passage: “the poor credit potential of most low-income families combined with their lack of shopping sophistication often results in the irony that they pay much more for a given quality of durables than consumers in higher income brackets. This does not mean that they spend more, although even this may sometimes be the case, but that they obtain considerably less value for their dollar”. (Caplovitz, 1963, p. 81) This passage also presents an important aspect for the understanding and evolution of the concept of poverty penalty already discussed above, that is, a quality parameter in relation to which the superiority of the prices paid by the poor, or cost- benefit, is identified. In addition to this aspect, others also reveal the precedence of Caplovitz (1963) in the Volume XXII Issue II Version I 22 ( ) Global Journal of Human Social Science - Year 2022 © 2022 Global Journals E Poverty Penalty: A Market-Based Review