ABSTRACT
Kaushik Basu and James Foster (1998) have proposed that in measuring literacy, and in planning for literacy programmes, it is important to take account of the intra-household externalities associated with literacy. Literacy, in this view, is something like a public good: literate members of a household are seen as conferring a beneficial externality on its illiterate members. As a consequence, ‘effective’ literacy is larger than would be yielded by a straightforward headcount of those who are literate. Furthermore, the presence of the literacy externality dictates that effective literacy is enhanced by a more, rather than less, equitable distribution of literates across households. This idea — which is both simple and powerful — is explored and explicated further in this paper.
