Sunday, September 28, 2014

Raise the bar on your charitable actions

There's a phrase people trot out when they want to justify a big-scale project that attempts to help people. It sounds like this:

If we just help one person, it'll all be worth it.

As an econ nerd, I cringe every time I hear it. That's not because I think helping people is overrated or an unworthy goal. Sometimes this cornball phrase is used for a project that saves people from dying. That's an important thing to do.

But what was the opportunity cost?

That is to say, could the resources that went into this project likely be used for alternative projects? Were those alternative projects likely to get off the ground, and if so, how many people would they have helped, and in what ways?

Some comparisons are hard evaluate. For example, is it more important to prevent five violent rapes or one domestic violence murder? There's no empirical way to make that comparison.

Perhaps some projects that help very few people are worth doing, but ignoring a cost-benefit analysis robs people of a chance to strategically maximize the amount of good they do.

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