How Individual Actions Affect Economic Inequalities • Good Non profit


Joe Pinsker: Can you go through one of the strategies you describe in the document?

Guillermina Jasso: Let's talk about the principle of transfers. In a nutshell, this means that if a transfer occurs from an individual to a relatively poorer individual, the inequality decreases. This is well known and many mathematical equations show it.

Suppose the richest person in a given distribution transfers a certain amount that will preserve his ranking [as richest]but it will improve the lot of the poorest person or of the population, the inequality diminishing.

Pinsker: To make this a little more concrete, is it recommended to donate to a charity?

Jasso: This is a very good question. One of the things I mentioned in the paper is that there are sometimes long chains of transfers, and it can be very difficult to see who is becoming better and who is being degraded at the moment. following certain expenses. What is the end effect of all these long chains of transfers? What is the final effect on inequality?

So, for example, if I buy a bestseller from a best-selling author, what is the final end effect on inequality? I do not know. There are so many, many small links in this chain. People who make paper, ink, binders, booksellers, etc.

Pinsker: What other approach do you mention in the newspaper?

Jasso: Another is the combination of the assortment – this, to my knowledge, was first described by Plato. If rich people marry rich and poor people marry poor, inequalities will remain unchanged or increase. But if the rich marry poor, inequality will decrease. So, he says, that's what people should do.

However, this mechanism of inequality is well known to specialists and it can be expressed mathematically. But there is a very serious side effect: economic disparity enter both spouses increase.

Pinsker: The problem is that if two spouses come from very different economic backgrounds, their marriage could be less harmonious?

Jasso: We need a lot, a lot of additional research. It might work if the rich who marry the poor are not really extreme, for example if a person in the 60th percentile of wealth marries a 40th percentile. Then, the side effect is less extreme than if it was a 99th percentile person who married a person of the first percentile.

Pinsker: I'm trying to think about what could be done with this knowledge. It would be strange to order people to look for partners who have less money than them. Rather, it is the idea for people to look at pools of potential partners with whom they surround themselves and try to put themselves in situations where economic diversity is greater?

Jasso: Yes, it's a great strategy. We already have a lot of possibilities for that. Many people play sports, for example. People go to church, they sing in the choir. Obviously, the more opportunities there are, the better.