Comments on: Poor in the U.S. = rich

By: Holden

Holden — Sat, 05 Dec 2009 16:13:23 +0000

Doug, I am not sure whether such a family could afford housing if not for public assistance, but the question seems somewhat academic to me. The fact that public assistance benefits are so much stronger here than in the developing world is a relevant part of the picture. We are not arguing for dismantling of these benefits; our focus is on the marginal dollar from a private donor.

By: Doug S.

Doug S. — Thu, 03 Dec 2009 04:13:35 +0000

In other words, is this family really living on what you can buy in the U.S. for $8000?

By: Doug S.

Doug S. — Thu, 03 Dec 2009 04:10:24 +0000

That makes sense, but should public assistance be counted as “income” in this kind of analysis? If I “earn” nothing, but receive various benefits (free housing, food stamps, etc.) then is my income nothing, or what it would cost to purchase those benefits on the open market?

By: Ian Turner

Ian Turner — Wed, 02 Dec 2009 23:57:37 +0000

Doug, likely qualified for Section 8.

By: Doug S.

Doug S. — Wed, 02 Dec 2009 20:17:09 +0000

That family only has a TV, running water, and a toilet if that family isn’t homeless. Are they getting subsidized housing from somewhere? If they’re not, I’d like to know how they’re getting a roof over their heads for less than $667 a month.

By: Holden

Holden — Tue, 01 Dec 2009 18:19:09 +0000

Michael, I would guess that the purchasing-power-parity calculations are far from perfect, and that there are people with much lower incomes who are much better off (materially) and vice versa. However, I do think they’re the best estimates available, and the overall picture they give seems likely to be accurate. I see the direct observations about standard of living as a common sense check: the U.S. family in question almost certainly has a TV, running water, and a toilet, things which are far from common in the rest of the world.

Jonah, agreed. The argument of this post isn’t that charity is always more effective when spent in the developing world. It’s much narrower than that.

By: Jonah Sinick

Jonah Sinick — Mon, 30 Nov 2009 02:47:27 +0000

Holden,

I find your remarks compelling as far as immediate effects of donations in the direction of alleviating the concerns of the poor go.

I’ll remark that there are contexts in which it seems that charitable efforts are better directed toward the developed world than toward the developing world. For example, if one is interested in preserving the environment, presumably one’s efforts in that direction would have greater effect in the developed world (which is presumably eating away at global natural resources much faster per person and where there’s more possibility of the discovery of relevant helpful technological innovations) than in the developing world.

By: Ian Turner

Ian Turner — Mon, 30 Nov 2009 02:01:13 +0000

Michael,

Is your argument based on representative studies, or on personal experience? It’s possible that the poorest Kazakhstanis and Costa Ricans were not so easily on display while in the country. As a relatively wealthy New Yorker, I know that I don’t get a regular view of the consumption habits of the cities lower classes.

Also, can you elaborate on the “relative inefficacy of simply giving money”? One of the conclusions that Givewell folks are slowly marching towards (and I with them) is that giving money to people may be the best way to help them.

By: michael vassar

michael vassar — Sun, 29 Nov 2009 08:06:12 +0000

Holden, I don’t think that you can realistically claim that a family of 3 with an $8K income in NYC is 70th percentile global wealthy. You can’t just use PPP numbers and multiply, you have to look at the actual basket of goods that the people in question are consuming. I have spent substantial time in Costa Rica and in Kazakhstan, in 1998 and 2000, not today, both are much richer now, especially Kazakhstan. Costa Rica is a mid-second-quintile-wealth country with freakishly high quality of life relative to GDP. Kazakhstan is now a mid-second-quintile petrostate but in 2000 it was a mid-third-quintile former Soviet mess (Aruna, of course, grew up in Kazakhstan 1991-1997, a fourth quintile region in a failing Soviet state). People in both countries had terrible conditions in some respects, but in both cases ordinary people had more stuff, more security, and in many respects better conditions than the poorest Americans, though they did lack some things we consider necessities. The subsequent increase in wealth of Kazakhstan without attendant improvements in standard of living are a testimony to the relative inefficacy of simply giving money to people who aren’t desperately poor.

I generally agree with the sentiment you are expressing though