Alberto Cottica
Alberto Cottica  ·  3 months ago
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The ever-brilliant @pluralistic calls our attention to the fact that, in the US of A, three companies control the market for school lunch payments, and they hit poor families with junk fees that go up to 60% of what families pay.

https://pluralistic.net/2024/07/26/taanstafl/#stay-hungry

Now, some of you might have seen newer #economics papers refer to something called “mode of provisioning”. The concept is not very intuitive, but – I believe – the story of school lunch payments is great to explain it.

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Alberto Cottica
Alberto Cottica  ·  3 months ago
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Some of these papers come up with dramatic – and often very encouraging – results. As a recent example, consider "How much growth is required to achieve good lives for all? Insights from needs-based analysis" by Jason Hickel and Dylan Sullivan

https://doi.org/10.1016/j.wdp.2024.100612

This paper comes up with a terrific punchline: you could provide everyone on the planet with “decent living standard” (I will define that in a minute) with as little as 30% of the energy and materials that we consume now.

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Alberto Cottica
Alberto Cottica  ·  3 months ago
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This is surprising, especially given that now we are nowhere near those levels of global welfare: Hickel and Sullivan cite an upcoming paper by Hoffman et al. that find over 95% of residents of low- and middle-income countries are deprived over at least one dimension of the decent living standard! So how is it that we could technically vastly improve our welfare with one third of the resources we are spending now? There must be a gigantic source of inefficiency lying around, but what is it?
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Alberto Cottica
Alberto Cottica  ·  3 months ago
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To answer this question, I need to backtrack a little and introduce needs-based analysis. This approach grew out of the dissatisfaction with the dominant method for measuring poverty, associated with the World Bank. This consists of choosing a “poverty line”, which is a level of per capita income. People who earn less than that level are labeled as poor.
Alberto Cottica
Alberto Cottica  ·  3 months ago
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The World Bank defines extreme poverty as the conditions of the people whose income is lower than 1.9 dollars a day, measured in purchasing power parity (PPP).

https://en.wikipedia.org/wiki/Purchasing_power_parity

PPPs were invented to normalize monetary measures to the different cost of living in different countries. Intuitively, a salary that barely allows a single individual to survive in Tokyo might support comfortably a family of four in rural Romania.