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AGB comments on How accurately does anyone know the global distribution of income? - Effective Altruism Forum

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Comment author: AGB 06 April 2017 07:21:14PM *  8 points [-]

I think your last paragraph is plausibly true and relevant, but this is a common argument and it has common rebuttals, one of which I'm going to try and lay out here.

However, $700/year (= $1.91/day, =€1.80/day, =£1.53 /day) (without gifts or handouts) is not a sufficient amount of money to be alive in the west. You would be homeless. You would starve to death. In many places, you would die of exposure in the winter without shelter. Clearly, the median person in India is better off than a dead person.

The basics of survival are food, water, accommodation and medical care. Medical care is normally provided by the state for the poorest in the West so let's set that to one side for a moment. For the rest we set a lot of minimum standards on what is available to buy; you can't get rice below some minimum safety standard even if that very low-quality rice is more analogous to the rice eaten by a poor Indian person, I would guess virtually all (maybe actually all?) dwellings in the US have running water, etc.

This presents difficult problems for making these comparisons, and I think it's part of what Rob is talking about in his point (2). One method that comes to mind is to take your median Indian and find a rich Indian who is 10x richer, then work out how that person compares to poor Americans since (hopefully) the goods they buy have significantly more overlap. Then you might be able to stitch your income distributions together and say something like [poor Indian] = [Rich Indian] / 10 = [Poor American] / 10 = [Rich American] / 100. I have some memory that this is what some of the researchers building these distributions actually do but I can't recall the details offhand; maybe someone more familiar can fill in the blanks.

A realistic minimum amount of money to not die in the west is probably $2000-$5000/year, again without gifts or handouts, implying that to be 100 times richer than the average Indian, you have to be earning at least $200,000-$500,000 net of tax (or at least net of that portion of tax which isn't spent on things that benefit you - which at that level is almost all of it, unless you are somehow getting huge amounts of government money spent on you in particular).

Building on the above, hypothetically suppose over the next 50 years the West continues on its current trend of getting richer and putting more minimum standards in place; the minimum to survive in the West is now $10,000 per year and the now-much-richer countries have a safety net that enables everyone to reach this. However, in India nothing happens.

Is it now true that I need at least $1,000,000 per year to be 100x richer than the median Indian? That seems peverse. Supposing my income started at $100,000 and stayed constant in real terms throughout, why do increases in minimum standards that basically don't affect me (I was already buying higher-than-minimum-quality things) and don't at all affect the median Indian make me much poorer relative to the median Indian? As a result I think this particular section 'proves too much'.

Comment author: the_jaded_one 08 April 2017 12:38:14AM 0 points [-]

why do increases in minimum standards that basically don't affect me (I was already buying higher-than-minimum-quality things) and don't at all affect the median Indian make me much poorer relative to the median Indian?

Well, this itself may prove too much.

Suppose that the minimum to survive in the west is raised to $90,000, and if you have less than that you are thrown out onto the streets and made homeless.

If the minimum to not be homeless is $90,000 and you earn $100,000, are you REALLY 100 times richer than someone on $1000 who has a shack to live in and food to eat?

and the now-much-richer countries have a safety net that enables everyone to reach this.

that's a nice fantasy but in reality the way the west works is if you are a single young male and you have less than enough money to afford rent, there is no safety net in many places, especially the USA and the UK. You are thrown into the homelessness trap.

Comment author: AGB 08 April 2017 04:51:58PM *  3 points [-]

If minimum standards rise to $90,000 and I'm earning $100,000, I would argue they do probably affect me substantially and my original premise of 'minimum standards that basically don't affect me' no longer holds. For example, I might to start putting substantial money aside to make sure I can meet the minimum if I lose my job, which will eat into my standard of living. That's why I used numbers where I think that statement does actually hold ($10,000 minimum versus $100,000 income).

that's a nice fantasy but in reality the way the west works is if you are a single young male and you have less than enough money to afford rent, there is no safety net in many places, especially the USA and the UK. You are thrown into the homelessness trap.

Sure, this is why I said 'hypothetically' and 'in 50 years'. I'm not sure your above claim is true in the UK even as of today in any case.

(UK benefits are a bit of a maze so I'm wary of saying anything too general, but running through one website (www.entitledto.co.uk) and trying to select answers that correspond to '22 year old single healthy male living in my area with no source of income', I get an entitlement of £8,300 per year, most of which (around £5,200) is meant to cover the cost of shared housing. Eyeballing that number I think 100pw should indeed be enough to get a room in a shared property at the low end of the housing market around here.

I think it is also true that a 21 year old wouldn't get that entitlement because they are supposed to live with their parents, but there are meant to be 'protections' in place where that isn't possible for whatever reason. I haven't dug further than that.)

Comment author: the_jaded_one 09 April 2017 11:41:11AM *  4 points [-]

If minimum standards rise to $90,000 and I'm earning $100,000, I would argue they do probably affect me substantially and my original premise of 'minimum standards that basically don't affect me' no longer holds.

And I think the reality of the situation facing many people in the intended audience of the original graph is at least somewhat like that.

As this debate has progressed, the amount of income corresponding the targeted person has gradually moved upwards from $70k gross in an expensive area of The West (Bay Area, Oxford UK, NYC, London) to $200k net in an average-cost-area (Ohio). I feel like there is something of a motte-and-bailey defence going on here:

  • the "motte" is the position that the superstar lawyer earning $200k after tax who inexplicably lives in Cleveland, Ohio could pretty reasonably be said to be roughly 200 times richer than the person in the developing world on $1000. Not quite true (because it still fails the division test), but close. Problem with the "motte": If you literally told young EA recruitment targets that they all earned $200k post tax and lived in Cleveland, Ohio where living costs are average, they would unanimously object that that's nowhere near their situation in life.

  • the "bailey" is position that young potential EA recruits earning $70k net in an expensive area are literally 100 times richer than an average Indian earning $700. Advantage of the "bailey": makes people feel extremely guilty and more likely to donate money or sign the pledge. Disdvantage of the "bailey": as always, it's not actually a defensible position. We can see this by the fact that as I push on it, a retreat is happening.

Comment author: AGB 16 April 2017 12:40:24PM 2 points [-]

Was this intended as a response to my comment? I didn't bring up the $70k figure or the $200k figure. I did take up one part of your argument (the 'minimum standards' part) and try to explain why I don't think using a $2k - $5k minimum as equivalent to the median Indian actually makes sense.

Advantage of the "bailey": makes people feel extremely guilty and more likely to donate money or sign the pledge.

FWIW I doubt this is actually true. I have generally strongly preferred to understate people's relative income rather than overstate it when 'selling' the pledge, because it shrinks the inferential distance.

Comment author: the_jaded_one 26 April 2017 03:37:54PM *  0 points [-]

I didn't bring up the $70k figure or the $200k figure

that may be true, but they are figures that have been brought up

FWIW I doubt this is actually true.

Maybe. But the promotional materials certainly seem to frame it that way.