Why do we make the poor pay more?

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Thank you to Sara Davies, Senior Research Fellow at Bristol University Personal Finance Research Centre. Sara has been hands on developing the framework for measuring the poverty premium and in my day job I use her research to calculate and report impact. 💪💪💪

Although we pitched this episode as being about measuring the poverty premium, mostly we spoke about how and why it arises, and some of the methodology behind the measurement. If you want to get into the technical details of how it’s measured, here are some of the resources we mentioned on the show:

• David Caplovitz’s 1963 book “The Poor Pay More: Consumer Practices of Low Income Families” → borrow a copy from the Open Library
• This early report by Save the Children shows the potential cost of the poverty premium
• Paying to be poor: uncovering the scale and nature of the poverty premium, published in 2016 is the seminal work from the Bristol University Personal Finance Research Centre. Some of the methodology (and data) has since been updated, and there’s a wealth of information about the poverty premium on the Fair by Design website
• We spoke a bit about scarcity mindset on the show.I’ve written a short report called Mind Over Money that explores this in action, and links to further background reading.

Finally, if you want to feel appalled about the cost of the ‘loyalty penalty’ have a skim through the Citizens Advice super-complaint to the Competition and Markets Authority.

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