How many consumption-doublings does a policy reform generate?
GiveDirectly’s unconditional cash transfers have long served as GiveWell’s cost-effectiveness baseline. GiveWell’s 2022 cost-effectiveness analysis estimates that GiveDirectly doubles the consumption of a person for a year for about $200. [1]
Tax and benefit reforms also affect households’ consumption. My nonprofit, PolicyEngine, builds free open-source software that computes the impact of custom tax and benefit reforms on outcomes like poverty and the budget. This slide from my EAGxBerkeley lightning talk shows how we will display poverty impacts of a custom tax reform in our upcoming redesign.
My proposal is to add a chart to our app showing the impact of a policy reform on sum(ln(net income)), which could translate to total consumption-doublings for comparison with GiveDirectly. This could enable more data-driven EA-style advocacy for poverty-reducing policies. Currently we have models in the US and the UK, but we intend to expand to low- and middle-income countries in the future, and this visualization would translate to those new country models where reforms might be more cost-effective.
Cell B87 shows that each philanthropic dollar spent generates 0.0034 units of value, which in this case is one-unit increases of ln(consumption). That is, it costs 1/0.0034=$294 to increase a person’s ln(consumption) by one unit for a year. Doubling consumption for a year therefore costs $294 * ln(2) = $204.
How many consumption-doublings does a policy reform generate?
GiveDirectly’s unconditional cash transfers have long served as GiveWell’s cost-effectiveness baseline. GiveWell’s 2022 cost-effectiveness analysis estimates that GiveDirectly doubles the consumption of a person for a year for about $200. [1]
Tax and benefit reforms also affect households’ consumption. My nonprofit, PolicyEngine, builds free open-source software that computes the impact of custom tax and benefit reforms on outcomes like poverty and the budget. This slide from my EAGxBerkeley lightning talk shows how we will display poverty impacts of a custom tax reform in our upcoming redesign.
My proposal is to add a chart to our app showing the impact of a policy reform on
sum(ln(net income)), which could translate to total consumption-doublings for comparison with GiveDirectly. This could enable more data-driven EA-style advocacy for poverty-reducing policies. Currently we have models in the US and the UK, but we intend to expand to low- and middle-income countries in the future, and this visualization would translate to those new country models where reforms might be more cost-effective.Here’s our GitHub. Our stack is Python/Flask/React.
Cell B87 shows that each philanthropic dollar spent generates
0.0034units of value, which in this case is one-unit increases ofln(consumption). That is, it costs1/0.0034=$294to increase a person’sln(consumption)by one unit for a year. Doubling consumption for a year therefore costs$294 * ln(2) = $204.