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Undercover Economist: What gives?

By Tim Harford

Published: May 4 2007 16:23 | Last updated: May 4 2007 16:23

I wrote recently about people who live on a dollar a day. Now, I have a dollar or two to spare, and so, dear reader, do you. So why not spread the wealth around? Good question. For one thing, there’s the fear that the money would reach the wrong people: corrupt charlatans, not-really-poor people, addicts...

Then there’s the ”curse of the free lunch” - or what a more strait-laced economist would call ”rent exhaustion”. It works like this: I fly somewhere deserving - say, Dar es Salaam - and hand out dollar bills to strangers. I’ll do it next Tuesday, starting at noon; please form an orderly queue. This would be guaranteed to produce a long line of people. Someone who made a dollar an hour would be willing to queue for up to an hour; someone on a dollar a day would be willing to queue for a day.

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