Tag Archives: Charity

Parable of the Multiplier Hole

By Robin Hanson · March 12, 2010 11:00 am · Comments (46)

Imagine that we discovered a “hole in space”, through which we could see an alternate Earth, filled with people recognizably like us, though different in many ways.  Those people could also see us.

While no objects could move from their side of the hole to ours, small items (but not humans) could move from our side to theirs.  Furthermore, the hole had the amazing property of multiplying everything we sent through by a factor F of a million!  That is, if you tossed a gold coin through the hole, a million identical coins would come out the hole on the other side.

How tempted would you be to toss useful items, like food, through the hole?   Remember, the cost to you, relative to the benefit to them, is 1/F, only one part in a million.  When considering the following variations, and their various combinations, consider not only F = a million, but also ponder what fraction F would make you indifferent to tossing or not:

  1. Your gift goes to a random person on the other side.
  2. Your gift goes to a government on the other side, which controls the hole.
  3. You can specify to whom your gift will go, using some simple descriptors like “poor”, “smart” etc.
  4. We could also do other things to help them, such as by studying a problem of theirs and sending them a report with suggested solutions.  But these other actions don’t get multiplied by F; a million copies of the report doesn’t help more than one copy.
  5. The hole isn’t very reliable, and only one time in a thousand does what you toss through the hole actually get to the people on the other side.  But when the hole does work 1000*F items come out the other side.
  6. You have very good theoretical reasons to think that most likely there are people much like us on the other side of the hole, but you can’t actually see through the hole (though they can see us).

The point of this parable is that interest rates would also greatly leverage any gift you gave the distant future folks.  For example, in 1785 a French author wrote a satire about Ben Franlkin, the most famous American to Europeans.  While Franlkin was famous for his Poor Richard’s Almanac, the satire mocked American optimism by having “Fortunate Richard” leave money in his will to be invested for 500 years before being given to charity.

Franklin responded by leaving £1000 each to Philadelphia and Boston in his will to be invested for 200 years.   He died in 1790,  and by 1990 the funds had grown to 2.3, 5M$, giving factors of  35, 76 inflation-adjusted gains, for annual returns of 1.8, 2.2%.  Why has Franklin’s example inspired no copy-cats?  Does no one care to help distant future folks through the multiplier hole of compound interest?

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Hiding Handouts

By Robin Hanson · March 1, 2010 3:30 pm · Comments (25)

Richard Thaler in the NYT:

Here’s a list of national domestic priorities, in no particular order:  Stimulate the economy, improve health care, offer fast Internet connections to all of our schools, foster development of advanced technology. Oh, and let’s not forget, we’d better do something about the budget deficit. … There [is] a way to deal effectively with all of those things at once, without hurting anyone. …

The usable radio spectrum is limited and used inefficiently. … The target that looks most promising in this regard is the spectrum used for over-the-air television broadcasts. … People in the industry refer to them as “beachfront property” … Over-the-air broadcasts are becoming a nearly obsolete technology. Already, 91 percent of American households get their television via cable or satellite. So we are using all of this beachfront property to serve a small and shrinking segment of the population. …  Professor Hazlett estimates that selling off this spectrum could raise at least $100 billion for the government and, more important, create roughly $1 trillion worth of value to users of the resulting services. …

Who would oppose this plan? Local broadcasters are likely to contend that they are providing a vital community service in return for free use of the spectrum. … [But] about 99 percent of these households have cable running near their homes, and virtually all the others, in rural areas, could be reached by satellite services. The F.C.C. could require cable and satellite providers to offer a low-cost service that carries only local channels, and to give vouchers for connecting to that service to any households that haven’t subscribed to cable or satellite for, say, two years.  Professor Hazlett estimates that $300 per household should do it: that amounts to $3 billion at most.

Yes, Hazlett’s solution would require poor rural couch potatoes to suffer the indignity of accepting more obvious handouts – today’s “free” tv better hides those handouts.  And yes we often pay substantial costs to show our allegiance to certain precious symbols.  But we pass up a trillion dollars of gains to avoid even the hint of dissing poor rural couch potatoes?

We forgo similar benefits when we let poor folk drive old very polluting cars, and then require expensive emissions reductions elsewhere, such as in power plants.  It would be far cheaper to ban old cars, and pay the poor more to compensate, but this also makes our handouts more obvious.

Couch potatoes and polluters are not exactly highly respected in our society.  So why is it that when such folks are also poor, we will throw away trillions in gains to avoid dissing them via direct handouts?

HT Alex.

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Telescope Effect

By Robin Hanson · January 19, 2010 11:00 am · Comments (16)
Even if 10 deaths do not make us feel 10 times as sad as a single death, shouldn’t we feel at least twice as sad? There is disturbing evidence that shows we may actually care less. … Paul Slovic … asked two groups of volunteers shortly after the Rwandan genocide to imagine they were officials in charge of a humanitarian rescue effort. Both groups were told their money could save 4,500 lives at a refugee camp, but one group was told the refugee camp had 11,000 people, whereas the other group was told the refugee camp had 250,000 people. Slovic found that people were much more reluctant to spend the money on the large camp than they were to spend the money on the small camp. … Would they rather spend $10 million to save 10,000 lives from a disease that caused 15,000 deaths a year, or save 20,000 lives from a disease that killed 290,000 people a year? Overwhelmingly, volunteers preferred to spend money saving the 10,000 lives rather than the 20,000 lives. …
Slovic once told volunteers about a 7-year-old girl in Mali who was starving and in need of help. They were given a certain amount of money and asked how much they were willing to spend to help her. On average, people gave half their money to help the girl. … One group of volunteers was asked whether they would give money to the little girl; another was asked whether they would donate money to the little boy. A third group of volunteers was told about both the boy and the girl and asked how much they were willing to give. People gave the same amount of money when told about either the boy or the girl. But when the children were presented together, the volunteers gave less.

Even if 10 deaths do not make us feel 10 times as sad as a single death, shouldn’t we feel at least twice as sad? There is disturbing evidence that shows we may actually care less. … Paul Slovic … asked two groups of volunteers shortly after the Rwandan genocide to imagine they were officials in charge of a humanitarian rescue effort. Both groups were told their money could save 4,500 lives at a refugee camp, but one group was told the refugee camp had 11,000 people, whereas the other group was told the refugee camp had 250,000 people. Slovic found that people were much more reluctant to spend the money on the large camp than they were to spend the money on the small camp. … Would they rather spend $10 million to save 10,000 lives from a disease that caused 15,000 deaths a year, or save 20,000 lives from a disease that killed 290,000 people a year? Overwhelmingly, volunteers preferred to spend money saving the 10,000 lives rather than the 20,000 lives. …

Slovic once told volunteers about a 7-year-old girl in Mali who was starving and in need of help. They were given a certain amount of money and asked how much they were willing to spend to help her. On average, people gave half their money to help the girl. … One group of volunteers was asked whether they would give money to the little girl; another was asked whether they would donate money to the little boy. A third group of volunteers was told about both the boy and the girl and asked how much they were willing to give. People gave the same amount of money when told about either the boy or the girl. But when the children were presented together, the volunteers gave less.

More here.  If you want to care more about distant victims, set aside your mental image of a large tragedy, focus your mind on one particular victim, and open your heart.  If you want to care less, instead of thinking about any one victim, try to visualize a much larger group of similar victims.  Now here’s the key question: do you want to care more or less?  Not sure? See which image you put in your mind, long enough to act on it.

This puzzles me a bit re near-far analysis.  It suggests we help distant victims more in near mode, even though far mode is where we more express abstract ideals we want others to see.  Do we not actually want others to think we help distant victims?

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Santa: Naughty Or Nice?

By Robin Hanson · December 21, 2009 3:10 pm · Comments (33)

Imagine you managed an organization that could:

  • Deliver several pounds of goods undetected and unstoppable, into several hundred million homes worldwide all on the same night, and to select which among thousands of possible goods go to which homes.
  • Manufacture many tens of dollars worth of state of the art goods, distributed among thousands of types of goods, for each of those homes.
  • Revamp your manufacturing line yearly, to keep up with changing conditions.
  • Track the behavior of billions of people in detail, and know their parents standards for “naughty” or “nice”, enough to classify as naughty or nice.
  • Estimate what goods people want, as accurately as could their parents.
  • Do all this year after year, always on the same day, whether others liked it or not.
  • Do all this completely “off the grid,” at an undisclosed location in complete secrecy, with unidentified members who never talk to anyone about their activities, who use no noticeable inputs from elsewhere, and who have no noticeable waste emissions.

Now consider what you could accomplish with such capabilities.  Toward the naughty side, you could achieve a military takeover of most of the world, and maintain totalitarian control thereafter.  Cooperative homes get good stuff; uncooperative homes get bombs; pretty soon they’d fall in line.

On the nice side, you could deliver food, medicine, tools, and self-defense weapons to a bottom billion of the world’s poor, sick, or oppressed.  You could also identify and punish the world’s corrupt and criminal, and reward the innovative and generous.  You could take a huge bite out of poverty, crime, corruption, and oppression.

Clearly Santa is one very powerful dude; the whole world pretty much hangs on his choice.  So what does Santa actually do? He gives toys to billions of children, mostly ignoring adults. He gives far more to rich kids than to poor kids, and he greatly favors cultures that celebrate his name over others. He mostly ignores his ability to sort people into naughty and nice; they are pretty much all labeled nice.  (Have you ever even heard of a kid who got coal? Wouldn’t that make the news?)

So where does this put Santa on the naughty vs. nice spectrum?  I’d say “mildly positive eccentric.”  Yes he is clearly far less naughty than he could be, but he is also far less nice than possible. He uses his abilities to help others, and his attention is admirably global. But he helps far less than he could, he chooses his own rather odd way to help, and he prefers to help high status folks who celebrate his eccentric contribution. Apparently even in our dreams this is about as much as we dare hope for from a human, no matter how powerful. Deep down we know human charity is not about help, even if it does sometimes help.

Added 7:30p:  Why, over the last century, do parents lie more about Santa to make kids happy, with kids more dissappointed to learn the truth, and yet finding out more often from those same parents?  Source:

A study from 1896 involving 1,500 children aged 7 to 13, which was repeated in 1979. …  More than 22 percent in the 1896 study admitted to being disappointed compared with 39 percent in the 1979 study. But only 2 percent and 6 percent, respectively, felt betrayed. … Close to 25 percent of children in the 1896 study learned the truth about Santa from their parents, compared with 40 per cent in 1979. … In 1896, 54 percent of parents said they perpetuated the myth of Santa since it made their children happy; compared with 73 percent in 1979 and 80 percent in 2000.

Added 23Dec: Adam Ozimek riffs wittily.

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Status Honesty

By Robin Hanson · December 15, 2009 9:35 am · Comments (58)

Scott Young ponders how honest to be about status:

People tend to ignore the status benefits of wealth. Most obviously because seeking status is a low-status behavior. Anyone seen grubbing for fame or new toys to impress their friends becomes less impressive.  As a result, I believe many people delude themselves that they want material possessions for intrinsic reasons. This is an unconscious effort to seek material wealth for purely status-related motives, and at the same time, not appear interested in grubbing for status. …

Some people would argue that the solution is to wipe yourself free of the need to obtain status. …  Another solution is to accept that people want status, and to pursue it zealously. … Of course, you could lie about these motives when asked, but still pursue them secretly. … One other solution seems to be the one most people pursue: search for status doggedly, but carefully delude yourself that every action you take for status, is actually pursued for other, nobler reasons. … None of these choices seem very appealing …

Perhaps the resolution to the conflict lies in accepting our need for status like all our other needs, hunger, sex or affection. … We should balance our strategy of life so that our pursuit of status mostly coincides with our other, nobler needs.  An artist might accept that recognition drives him. But he can also choose strategies that balance this drive with his need for creative expression, mastery or public impact.

No, no.  Scott, you are thinking you are built with separate desires for status and creative expression (etc.), which you must consciously trade against one another.  But we rarely need to consciously try to achieve status; usually the details of our desire for creative expression (etc.) are already designed to achieve status. Continue Reading "Status Honesty" »

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Microlending Fails

By Robin Hanson · December 6, 2009 6:00 am · Comments (31)

The Boston Globe published an article in September, subtitled, “Billions of dollars and a Nobel Prize later, it looks like ‘microlending’ doesn’t actually do much to fight poverty.” …

Three important randomised controlled trials were unveiled this year. In one, economists … persuaded a lender in Manila to tweak a credit-scoring computer program so that it randomly awarded or denied loans to marginal borrowers. … Male-owned businesses tended to become more profitable after a loan, and female-owned businesses did not. … The loans produced no improvement in diet or income about 18 months down the line.

[In] a second trial … a leading microfinance operator agreed to randomise … The company chose 104 suitable areas of the city but at first only marketed loans in 52 of them. … Households seemed to use the loans to buy more expensive goods and then cut back on everyday spending to repay the loan, but income did not rise, nor were there improvements in health or women’s empowerment. Business owners did manage to improve profits. The time horizon, again, was less than two years.

A third [non-randomized] trial, of a micro-savings scheme in rural Kenya … found that the savings accounts were popular among women and helped them save, invest in businesses, spend more and cope with bad luck. All this was despite the fact that the accounts paid no interest and charged hefty withdrawal fees. …

The reason for the backlash is obvious: microfinance was supposed … to emancipate women, create millions of entrepreneurs and get rid of stubborn stains on your collar. … “Suppose microfinance is not having much average impact on poverty, but is giving millions of people a modicum of greater control over their lives … is that so bad?”

More from Tim Harford.  Gee, another anti-poverty silver bullet turns to rubber.  Guess we’ll need another decade or two to build up another great white hope, before it too disappoints.  Yet we’ve known for many decades how to help the world’s poor while actually benefiting us in the process: allow more immigration.  Yes even immigration has limits, but that’s no excuse for why we haven’t done all we can.

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Do Men Hurt More?

By Robin Hanson · November 24, 2009 3:10 pm · Comments (157)

I wrote:

Biologically, cuckoldry is a bigger reproductive harm than rape, so we should expect a similar intensity of inherited emotions about it.  If 2+% of women were raped and we had a reliable cheap way to identify the guilty party, don’t you think we’d require that?

Many were offended at my suggesting cuckolding hurts a man remotely as much as rape hurts a woman.  Reasons I heard:

  • what the cuckold doesn’t know can’t hurt him
  • lots of men don’t mind raising genetically unrelated kids
  • rape victims are more socially disapproved of
  • rape has direct physical effects, while cuckoldry does not
  • rape victims are more often diagnosed “post traumatic stress”
  • rape victims they know seem more expressively upset

Let’s consider these last two arguments.  We all know that women tend to be more expressive about their complaints – you can’t beat ‘em for wailing and gnashing of teeth.  But the fact that men act more stoic and complain less doesn’t mean they hurt less.  To economists, the relevant standard is willingness to pay, and by this standard new results suggest men hurt more from most harms:

What’s a marriage worth? To an Aussie male, about $32,000. That’s the lump sum Professor Paul Frijters says the man would need to receive out of the blue to make him as happy as his marriage will over his lifetime. An Aussie woman would need much less, about $16,000.  But when it comes to divorce, the Aussie male will be so devastated it would be as if he had lost $110,000. An Aussie woman would be less traumatised, feeling as if she had lost only $9000. …  The lifetime boost to happiness that flows from a birth – for the mother around $8700, for the father $32,600. …  The death of a spouse or child causes a woman $130,900 worth of grief. … It costs a man $627,300.

HT to Katja Grace.  I’d bet that male willingness to pay to avoid cuckoldry is not much less than female willingness to pay to avoid rape.

Added 10:30p: I’d prefer to be raped rather than cuckolded; any other men have a preference?

Added 6:30p: Here is data on men being more stoic.

Added 3Dec: Roissy did a poll of his male readers; over 3/4 prefer rape to cuckoldry.

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Inequality Is Down

By Robin Hanson · November 1, 2009 9:50 am · Comments (12)

Alex liked Arnold’s trend summary:

Perhaps the most important trend of the past thirty years is the increased importance of cognitive skills relative to physical labor. … Consequences: … women['s] comparative advantage went from housework to market work. … [who now] … look for [mate] complementarity in consumption … [which] leads to more assortive mating … [which] leads to greater inequality across households … [and] children. …

Inequality is exacerbated by globalization and technological change. If your comparative advantage is basic physical labor, you have to compete with machines as well is with workers from the Third World.

But this is only for rich nations; global inequality is down:

We … estimate the income distribution for 191 countries between 1970 and 2006. … Using the official $1/day line, … world poverty rates have fallen by 80% from 0.268 in 1970 to 0.054 in 2006. The corresponding total number of poor has fallen from 403 million in 1970 to 152 million in 2006. … We also find similar reductions in poverty if we use other poverty lines. …

Global income inequality has fallen between 1970 and 2006. This is true for the Gini coefficient, for a wide variety of Atkinson indexes and General Entropy indexes as well as the 90th-to-10th and the 75th-to-25th percentile ratios. …

Total growth in world welfare measured is estimated to be between 77% and 160%, with most estimates over 100%.  At the regional level … whenever GDP grows, poverty tends to decline and whenever poverty declines, GDP tends to grow.  Poverty has declined substantially in East and South Asia, and has recently began declining in Africa.

Global change is of course what matters most.  If the price of making the world’s poor richer has been slower gains for the least rich of rich nations, it seems a good deal overall.

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Hide The Blood Money

By Robin Hanson · October 24, 2009 11:00 pm · Comments (10)

Blood donations are a famous oft-cited case of where we might get less of something of we pay more for it.  Now it seems the problem is just with cash, not with payment; apparently we dislike an appearance of being paid, not payment itself:

We set up … a survey administered to 467 blood donors in an Italian town, and find that donors are not reluctant to receive compensation in general: A substantial share of respondents declared they would stop being donors if paid a small amount of cash, but we do not find such effects when a voucher of the same nominal value is offered instead. The aversion to direct cash payments is particularly marked among women and older respondents, while there are neither gender nor age differences in the response to the voucher.

More here.

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Unequal Beauty Silence

By Robin Hanson · October 19, 2009 11:00 am · Comments (31)

Back on Sept 5, Sebastian Perez published a satritical Post oped advocating reducing beauty-based inequalities:

Most champions of the less privileged have never made a practical effort to mitigate the social differences caused by the inequitable distribution of what, nowadays, is a factor with an enormous socioeconomic impact: beauty. … I suggest … political constitutions … should state that citizens may not be discriminated against on the basis of their physical attractiveness. …

Governments should … ensure the supply of low-priced makeup, anti-wrinkle creams, aesthetic plastic surgery, etc. … financed through a tax on the beautiful people in each country.  By law, companies should be obliged to guarantee minimum employment quotas for less attractive people, especially in the movie industry, television, modeling and beauty pageants.  Such affirmative action would help compensate for so many years of hateful discrimination based on looks. … The doormen at fashionable clubs cannot continue to mercilessly make decisions about who gets in based only on physical attractiveness. Such discrimination should lead to jail time and fines.

I was reminded of this oped by John Nye:

Perhaps the real issue … [is] why certain inequalities which are also unevenly distributed — such as looks, intelligence, ability, or personality — do not invite as much social envy or opprobrium as disparities in income or wealth resulting from hard work or shrewd dealing. These differences are probably as large or larger than the measured inequalities in dollar income, yet go unmeasured and often excite no commentary in discussions of inequality.

Searching for thoughtful critiques replying to Perez’s oped, I could fine none – only a few short snippy comments.  (Same for Nye.)  Why the deafening silence?

Let’s be clear: the issue is why those concerned about other inequalities, such as re genders or ethnicities, seem so uninterested in inequalities associated with beauty, etc.   Not only could we cause some people to look less pretty, we could use money to compensate ugly folk, reducing total inequality of utility (and increasing total utility if we are risk-averse in status).  Yes we can influence our beauty to some extent, but compensation could be tied to more fixed features such as height, skin smoothness, or body symmetry.

One theory is that what we have seen are somewhat random coalitions: the strongest support for reducing certain inequailties come from member groups who are either on the losing end of an inequality, or get signaling benefits by showing sympathy to such groups.  But no coalition wants to help groups that are too intrinsically weak, producing disgust and derision instead of sympathy from onlookers.  So the ugly, the stupid, or beta males, for example, tend to make unlikely coalition partners.

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