I donāt have a background in development economics, either, and posted this mostly because I thought people with an interest in that topic might enjoy it.
I do have some thoughts on your question, though. You are correct in pointing out that peopleās real circumstances vary widely, and that someone wealthier might get more āreturnsā on money than someone poorer because of other differences in their lives. (As an extreme example, you could argue that hunter-gatherers living outside of any economic system are some of the poorest people in the world but would have no use for money.)
However, I think the author of this article would argue that these differences tend to be subsumed by the vast numbers of people in the areas being discussed, and that there are good reasons to believe that, in general, the marginal utility of extra money is much higher for people with lower incomes. From the full paper:
To interpret and expand on this (in a way Iām not sure the author would endorse): People around the world spend a lot of their money on the same kinds of things (food, housing, healthcare). These āproduct categoriesā all seem to have clear patterns in marginal utility. For example, imagine the difference between a $500 and $1000 apartment in Edinburgh, and then the difference between $1000 and $1500. Or the difference between $1 and $3 vs. $3 and $5 worth of food in a Kinshasa market.
Of course, people donāt always have access to the types of goods theyād need to derive the most benefit from their funds. And sometimes, a relatively small amount of money (for oneās country) could be lifesavingāfor example, you sometimes see stories about people dying in the United States because they couldnāt afford an inexpensive medication.
But itās very difficult to find lifesaving opportunities in richer countries at scale. Itās much more complex to find indebted people who are about to be attacked by mobsters than it is to find children who need vaccinations.
Thatās all I have time for in a response now, but I hope it added a bit of useful context. As with many questions relevant to EA, one could write a long book on this topic without running out of new things to say and arguments to make, but I think that most of the details are relatively minor compared to the basic argument that money goes further for the average poorer person than the average richer person.
I donāt have a background in development economics, either, and posted this mostly because I thought people with an interest in that topic might enjoy it.
I do have some thoughts on your question, though. You are correct in pointing out that peopleās real circumstances vary widely, and that someone wealthier might get more āreturnsā on money than someone poorer because of other differences in their lives. (As an extreme example, you could argue that hunter-gatherers living outside of any economic system are some of the poorest people in the world but would have no use for money.)
However, I think the author of this article would argue that these differences tend to be subsumed by the vast numbers of people in the areas being discussed, and that there are good reasons to believe that, in general, the marginal utility of extra money is much higher for people with lower incomes. From the full paper:
To interpret and expand on this (in a way Iām not sure the author would endorse): People around the world spend a lot of their money on the same kinds of things (food, housing, healthcare). These āproduct categoriesā all seem to have clear patterns in marginal utility. For example, imagine the difference between a $500 and $1000 apartment in Edinburgh, and then the difference between $1000 and $1500. Or the difference between $1 and $3 vs. $3 and $5 worth of food in a Kinshasa market.
Of course, people donāt always have access to the types of goods theyād need to derive the most benefit from their funds. And sometimes, a relatively small amount of money (for oneās country) could be lifesavingāfor example, you sometimes see stories about people dying in the United States because they couldnāt afford an inexpensive medication.
But itās very difficult to find lifesaving opportunities in richer countries at scale. Itās much more complex to find indebted people who are about to be attacked by mobsters than it is to find children who need vaccinations.
Thatās all I have time for in a response now, but I hope it added a bit of useful context. As with many questions relevant to EA, one could write a long book on this topic without running out of new things to say and arguments to make, but I think that most of the details are relatively minor compared to the basic argument that money goes further for the average poorer person than the average richer person.