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zooko

ⓩ

@zooko

Dec 3, 2019

This is amazing. The first ever Randomized Controlled Trial of the effects of donating cash to poor households.

Academic article: emiguel.econ.berkeley.edu/assets/miguel_

Not only did the recipients benefit *more* than a dollar’s worth of benefit (over 18 months), but so did their entire community, even those who didn’t receive any donations!

Total benefit to the whole community of a dollar’s donation: more than $2.5! (Over the course of 18 months.)

And no, none of the ill effects — of laziness, vice, or envy — that people have speculated would result showed up in this experiment.

This lesson could extend beyond donations. It could extend to Universal Basic Income. But it could also extend further: to systemwide efficiency. Reducing the cost of everything by a dollar is equivalent to donating a dollar to every person!

Jesse Powell

@jespow

Replying to

@zooko

Might require another study but I would bet that the outcomes of winning a $1000 lottery unexpectedly are very different from being guaranteed to receive $1000/mo. People tend to upgrade lifestyles to the point of barely getting by when the income is recurring.

4:34 PM · Dec 3, 2019Twitter Web App

Replying to

That effect, which the economists call "dis-saving" was analyzed in this study, both in the recipients, and in their non-recipient neighbors (who might have started spending more to Keep Up With The Joneses). No such effect was observed during the course of this study.