david_reinstein

2196Monson, MA, USAJoined May 2017

Bio

davidreinstein.org

I am a Senior Economist at Rethink Priorities (https://www.rethinkpriorities.org/our-team), previously an Economics lecturer/professor for 15 years

I'm working to impact EA fundraising and marketing; see https://bit.ly/eamtt

And projects bridging EA, academia, and open science (esp. the 'Unjournal') ... see bit.ly/eaprojects

My previous and ongoing research focuses on determinants and motivators of charitable giving (propensity, amounts, and 'to which cause?'), and drivers of/barriers to effective giving, as well as the impact of pro-social behavior and social preferences on market contexts.

Podcasts: "Found in the Struce" https://anchor.fm/david-reinstein

and the EA Forum podcast: https://anchor.fm/ea-forum-podcast (co-founder, regular reader)

Twitter: @givingtools

Comments
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Yes, it's true that Ag Economics (e.g., at Berkeley) presents a pretty good example of the coexistence of separate departments for two very much overlapping fields. Might be worth looking into more detail about how the Ag Econ departments managed to set that arrangement up.

By the way, the stuff is all potentially interesting to idealistic students. I fear I was largely teaching a group of personal-financially-motivated students.

But still, I'm not sure the term "Welfare economics" will bring them in. Worth doing some surveying on, perhaps

But wouldn’t this be hampered by welfare economics already being (seen as) an existing field of economics?

Also the name “welfare economic” seems like one that students might see as dry or impractical. Micro anecdata point is that when I taught microeconomics and had the students vote on which topics they were interested in “social welfare functions” got among the fewest votes.

EA Forum 'human narrated' podcasts are coming back soon in some form or another, with some new partnerships.

For now, see "Hosting/introducing: "EA Forum Summaries Weekly", narrated and produced by Coleman Snell. " by Effective Altruism Forum Podcast.

https://spotifyanchor-web.app.link/e/5kui2HqlCtb

#Which Benefitting charities

It is worth considering some causes that may not be as effective as the EA community typically endorses, for the purpose of resonating with a broader section of the public, perhaps in addition to Global Health and Development and Animal Welfare.

I think this already exists enough with Newman's Own etc. I think we should try to focus on GH&D here and maybe some Global Catastrophic Risk prevention public goods. Animal causes: maybe, but only to some demos/products (like vegetarian stuff).

Which Market Sectors

Another approach is to capitalize on virtue-signaling, perhaps through products that could enable a consumer to conspicuously show that they bought through a Guiding Company. More

I strongly agree with this. Focus on conspicuous consumption things.

low-differentiation sectors, it may be easier to construct a “no-brainer” where a consumer is genuinely ambivalent as to two product

But are there substantial profits to be had by newcomers in such sectors? The profit margins may be low for such commonplace undifferentiated sectors.

Repugnant transactions:

I also suggest market sectors where there is some reluctance/repugnance to buying the product or service. The charity aspect will allow some moral licensing. E.g., Child.org (Thomas Muirhead) allowed people to donate in exchange for cutting-in-line at some festival.

Somewhat minor, but perhaps an important example

Consequently, there is a dimension of difference in the global consumer economy on which almost no sellers compete:: the identity of the entities that benefit from your purchase, often, owners in some form.

A lot of companies (e.g., Big Y) advertise themselves as 'American owned. '

A movement that enables everyday people to help charities without sacrificing anything personally should be much easier than one that demands people give significant things up or even mildly inconveniences people.

But can we really quantify the benefit?

  • Charities already hold shares of companies

  • People already do consider the owners of companies (usually through a political lens … e.g., "Home Depot owner supports right wing causes so people boycott" or some such

  • How much more will shopping at a "Guided Consumption owned company" actually lead more to go to the charities?

  • Note that If the big companies are differentiated in some way (like 'monopolistic competition' suggests, there could be a substantial cost to consumers (and to efficiency) to choosing the 'charity supporting brand'

And, perhaps more importantly, will people (over)compensate for this by reducing donations elsewhere?

By the way, I'm adding comments and suggestions inline using the hypothes.is tool. Get an account and install to see and interact with these.

Some key things in threads below...

I didn't really misunderstand your proposal, but I am sort of thinking "at the margin, why would a rational altruistic consumer buy from these firms."

So basically you are saying

  1. Charities/philanthropists should invest in companies and tell people they are doing this, and tell people what share of profits is going to the charity.

OK they already do invest in companies, but they should tend to invest in those companies that are altruistic-consumer-facing, perhaps.

  1. People will be motivated to shop at these companies rather than at other companies

This seems kind of obviously true and reasonable, and to some extent it already happens (Bill Gates and Microsoft etc.) But maybe it should happen more and be publicized more. So maybe I mainly agree with you on this, and it seems like a good initiative.

But I think the 'at the margin' questions still should be considered.

From the POV of the rational altruistic consumer, it must be the case that by buying a product specifically from the GC firm, this leads more money to go to the charity in net[1].

Going back to the idealized models of microeconomics With 'perfect competition' or 'monopolistic competition', firms are meant to enter (and introduce new products) until no 'super-normal' profits are left. In such worlds I am not sure if a consumer preferring to buy from a GC company actually leads that company to make more profit. At least in perfect competition, firms set their price at marginal cost, and entry occurs until all firms are pricing at their average cost, and thus making no profits. Nor, with average cost pricing, are they making any incremental profits from additional purchases.

Our "Fair Trade paper" basically makes the point that even if firms are pricing at cost, a firm that pays its workers/suppliers more could, under some conditions, charge less than this markup to consumers, making it rational for altruistic consumers to buy from it. That's the 'synergy' we talk about.

Of course the real world does not involve perfect competition ... and the condition above is basically 'only once we reach equilibrium'. But I think these issues still need to be considered. Suppose we are in a world where firms sequentially rival for monopoly. Or maybe there is only room for 1 firm in a particular industry. How is it that a firm that donates from its profits to charity could dominate such an environment. (I think you make some good points in this direction, as does Paul Pecorino. I just think these points should be addressed, it's not a complete "no-brainer".


  1. I say 'in net' because, in case the equivalent product is more expensive at the GC firm, the amount going to the charity must exceed such a difference ↩︎

And in case it's interesting, here is a slide presentation of a talk on this paper I gave (a long time ago), which includes some of the empirical analysis at the bottom (which was dropped from the published paper).

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