Thanks for the interesting question, Joseph. I agree the optimal donations as a fraction of net income depends on circumstances. However, I would say it mostly depends on the number of dependents and net household income, not on the disposable income. To give an extreme example, a millionaire can have very little disposable income by living in a super expensive house, but in this case I would argue it would be better (from an altruistic perspective) to move to a cheaper house to donate more.
I agree, what you write makes sense. I suppose that like so many financial things, it depends a lot on the details of how we define ādisposableā (or āreasonableā or āacceptableā). I strongly endorse the general principle of people donating money if it causes only minor decrease in their quality of life, such as shifting from a super expensive house to a very comfortable house.
Most people without children who rent could probably spend much less money on rent by finding lower quality housing, sharing rooms, etc. There are certain lower limits that people arenāt willing to go below (most of us probably wouldnāt want to live in an apartment with concrete floors, no shower, and lots of cockroaches, even if that allowed us to donate extra money). But there is probably plenty of realistic conceptual space between the millionaire who spends lots of money on an expensive house and the impoverished person living with multiple roommates in low-quality housing.
There are also certain limits required by law (e.g., the implied warranty of habitability) or by market conditions (e.g., even if you were willing to live in $100/āmo housing, no one may be interested in selling it in your area). I think thatās something the purchasing power parity calculations can miss in this context.
Thanks for the interesting question, Joseph. I agree the optimal donations as a fraction of net income depends on circumstances. However, I would say it mostly depends on the number of dependents and net household income, not on the disposable income. To give an extreme example, a millionaire can have very little disposable income by living in a super expensive house, but in this case I would argue it would be better (from an altruistic perspective) to move to a cheaper house to donate more.
I agree, what you write makes sense. I suppose that like so many financial things, it depends a lot on the details of how we define ādisposableā (or āreasonableā or āacceptableā). I strongly endorse the general principle of people donating money if it causes only minor decrease in their quality of life, such as shifting from a super expensive house to a very comfortable house.
Most people without children who rent could probably spend much less money on rent by finding lower quality housing, sharing rooms, etc. There are certain lower limits that people arenāt willing to go below (most of us probably wouldnāt want to live in an apartment with concrete floors, no shower, and lots of cockroaches, even if that allowed us to donate extra money). But there is probably plenty of realistic conceptual space between the millionaire who spends lots of money on an expensive house and the impoverished person living with multiple roommates in low-quality housing.
There are also certain limits required by law (e.g., the implied warranty of habitability) or by market conditions (e.g., even if you were willing to live in $100/āmo housing, no one may be interested in selling it in your area). I think thatās something the purchasing power parity calculations can miss in this context.