The Impact of Change (the monetary kind)
Today's NYT
imes draws attention to how Zimbabweans are spending so much time waiting around for change -- not change of the political nature this time, the NYTimes notes, but change--small money--for any simple purchase. From bus rides, small purchases of fruit or vegetables, or even a weekly supermarket trip, vendors just don't have change.
But these days, Robson Madzumbara spends a lot of time quite literally waiting around for change. Pocket change, that is. He waits for it at supermarkets, on the bus, at the vegetable stall he runs and just about anywhere he buys or sells anything. “We never have enough change,” he said, manning the vegetable stall he has run for the past two decades. “Change is a big problem in Zimbabwe.”
The article highlights the relevance of IPA's most recently posted evaluation summary. The study, run by Lori Beaman, Jeremy Magruder, and Jonathan Robinson found that in Kenya the average firm loses an estimated 5 to 8 percent in profits from a combination of sales lost because of not having change and sales lost while searching for change.
Anyone who has ever tried to buy a piece of fruit or even a week's worth of fruits and vegetables in a market in the developing world with the bills that the local ATM spits out will understand this problem--no one ever has the right change.
The study further tested the impact of providing information to the firms about the impact of having change on hand. The estimates indicate that overall, changes in behavior from simply being reminded of the impact of having change on hand resulted in a 12 percent increase in profits. For the full evaluation summary, click here. To read the full academic paper, click here.
It seems from the NYTimes article that in Zimbabwe, people are well aware of the change problem, but imagine the impact this widespread lack of change must be having on Zimbabwe's shops! Now the question remains if Zimbabwe can overcome both its change problems.
Print this page
Share
Comments
"Changing Poverty"
Poverty is a issue that takes everyones helping hand in order to create any sort of change. Ranging from government intervention to the simple working man, everyone can do their part. In my opinion, the problem should be attacked at its roots. If education were to be better funded, young children could grow up learning skills that would put them in positive positions to enter the job market. If this were the case, they could, in years time, find jobs in more populated areas. These jobs aquired would allow people to expand their reach to their native land where in turn they could help bring change of all sorts to the region.
Searching for Innovation
Having been a Peace Corps Volunteer, along with working internationally for many years, I can attest that this is a challenge in many countries around the world. My question to you, who dubiously write a fact based article and post it via 'Innovations' for Poverty Action (but seriously... this shouldn't be much of a surprise to people who have ever traveled to, none the less lived in BOP markets), is: so... what should countries do, at an economic level to address this issue? Where's the innovation? Suggestions?
I look forward to your follow-up article.
Post new comment