Welcome back! If you missed it, part 1 details some background on this post series, which in essence is a collection of my reflections after taking the CEA Intro to EA Virtual Program course this past summer. This post is for Chapter 2: Differences in Impact.

My awesome facilitator during the EA virtual program course  (and the first person I've ever exchanged EA thoughts with) was kind enough to edit and help me further enrich this post. Thank you @NBjork!

  • A few readings for this chapter highlighted some statistics that not only surprised me, but also stuck with me and I felt compelled to note them down so that I could revisit them occasionally to be reminded of their meaning:
  • Now, after covering that I find these statistics very valuable, I do have some misgivings with how the conversation seems to take place. Namely, lacking necessary nuance.
    • If you went to someone in one of the richest countries in the world who lives on $30/day, that person will absolutely be facing great financial (and connected) struggles in their everyday life. Highlighting that person in that situation, who cannot afford shelter, food or medical care, as being in the 15% richest people in the world, may be true, but it is also immensely out of touch. I think we should really include empathy in such discussions.
      • This 80,000 hours article does a good job of highlighting the paramount reasons we focus on poorer areas: poor people in rich countries are less, and tougher to help.
    • A person in a poor country, living above the poverty line (say $10/day) is better off than a person in a rich country, living below the poverty line (say $20/day) from a personal financial standpoint. Even though absolutely, the latter is twice as wealthy as the former if we only take into account income. The nuance we lack is the other side of the equation: cost of living and expenses.
    • I think it would be more prudent, and paint a clearer picture if when we refer to the wealth of different people, we not only take into account their wealth as a simple metric of money coming in, but as a ratio of income to cost of living. Maybe even frame the discussions around already established ideas such as the poverty line. This way we take into account multiple necessary factors which some other discussions ignore.
    • In essence, I believe there are instances we should compare people to their own environment, not to one they do not get to experience which incorrectly paints a more comfortable picture for them.
    • Another thought is that we instead focus not on all income as now, but on “discretionary income.” By that I mean that we subtract the cost of living expenses from the income, and then the left over difference can be compared in absolute terms. So we do a similar comparison as currently done, but only for income which is above that required to meet the poverty line (or some other such  baseline), instead of all of it.

Thank you all for taking the time to read through these reflections and feel free to leave any feedback you think relevant. I am especially open to resources that expand on these thoughts further! 

Look out for the chapter 3 reflection post soon!

Comments4
Sorted by Click to highlight new comments since: Today at 7:08 AM

The nuance we lack is the other side of the equation: cost of living and expenses.

This is a very common misunderstanding, and something that I think we should communicate much better in introductory materials, but sadly these numbers are already adjusted for purchasing power / cost of living [1]

  1. ^

    See a more technical definition on Wikipedia

I agree the OP seems to not understand PPP (and be under the misapprehension that the issue is a lack of 'empathy'), but I do think something of their argument can be salvaged. PPP uses something like the average basket of goods, but the basket of goods that the poorest people buy may well be more expensive in the first world because regulation etc. mean the low-end products that would be an ideal fit for their budget constraint are simply unavailable. I don't think PPP adequately captures the fact that something being regulated out of existence is sort of like it costing a lot more, and this disproportionately affects the poorest people.

I think the first post I linked to makes a similar point that I think matters more, in practice:

However, if you’re thinking about consumption rather than income (as you should), there is a difference which does make the comparison to “$1.25 living in the US” misleading: in the US you just can’t buy the sort of low-quality goods that you can in developing countries. Markets just don’t exist for those goods. Even the most basic lentils and rice sold at Walmart in the US would be regarded as a luxury item for people living on $1.25 a day.

But maybe regulations matter even more in some jurisdictions with e.g. mandatory expensive health insurance, or no social housing, strong anti-homelessness legislation/architecture, and expensive regulations on habitability.

 

In any case, an even more important point, in my experience, is that the difference between "necessities" and "luxuries", and between "rich" and "poor", is very cultural/contextual. So regardless of PPP, if someone is living on $2/day and everyone around them is living on $100/day, they're going to be much worse off than someone living on $2/day surrounded by people living on $1/day.[1]

 

I do not think this hurts the core argument (the global poor are really poor) significantly, though, given how strong it is and that there are strong arguments in the opposite direction. From the same post:

[In a rich country] With an income of $1.25 a day you could have a much better quality of life than the extremely poor. You can dumpster dive and live off the excess of the affluent country; [you] have free access to roads and lighting, a good legal system and police protection, and medical assistance if [you] get sick.

  1. ^

    Anecdote: when all my friends were university students, we were living on a few hundred € per month (~75% of it in rent). Now that all my friends make lots of money, their "needs" are clearly much more expensive, and someone living on the same standards now would be socially/comparatively much poorer.

Thank you both. That's actually the first time I see the $1.25/day post. I'm not sure if it's due to it being more than a decade old or other reasons, but I found it extremely useful in directly and concisely explaining that such values are taking into account PPP and are based on consumption. 

As that relates to the readings in the EA intro program, I just went back to check, and what I missed was that the analysis and comparisons are based on "international dollars" which account for PPP. 

As mentioned though having a dedicated post in the handbook referring to this would be recommended. It would certainly answer some of the confusion I've had understanding some of the points before y'all took the time to respond here!