On Fri, Jun 06, 2003 at 12:25:11PM -0400, Robin Hanson wrote:
> Typical charity recipients also do not have access to borrowing
> that are as efficient as the ones available to you. So yes you could help
> them by delaying charity to people who would like to save, and borrowing
> money yourself to give money to people who would like to borrow (and then
> not giving them as much later). But unless you have a way to tell which
> charity recipients fall into which class, it is hard to see how to help
> them overall.
Good point. There is a way to tell which recipients fall into which class
though. Just ask them. That is, when giving to a recipient, instead of
giving a bundle of cash, have him design an income stream for himself
that has the same present value (to the donor) as the bundle of cash and
give him that instead.
This might increase transactions costs significantly, however. So I wonder
if there is a way to tell whether on average charity recipients would
rather borrow or save. Could someone do a study where you pick a random
sample of charity recipients, have them design income streams for
themselves (and have a trustworthy organization commit to giving them the
income streams so they have proper incentives to report accurately) and
then average out the results?
This still isn't quite right, because it ignores future generations.
Clearly a potential charity recipient who hasn't been born yet would
prefer that I delay giving to charity, but the study won't be able to
survey them, so the result will be biased towards giving too early. How to
solve this problem?