It Finally Ends, and the Permanent Income Hypothesis
Finally I turned in my Philosophy of Science final paper, which marks the end of the past 100 hours of studying, sleeping, and writing. Finals week at UChicago is over for me. Until the one in Spring Quarter.
Of course, in the middle of that studying, sleeping, and writing, I’ve been glued to news reports about Japan. The condition of the nuclear reactors is extremely troubling, but so is the condition of many people in areas destroyed by the tsunami.
While Japan is a wealthy nation with lots of resources, there’s no such thing as offering too much help. I’ve been reflecting on how we can help, and I’ve also been reading a lot in the blogosphere on this very topic.
One of my favorite organizations in the world is Medecins Sans Frontieres (Doctors Without Borders).They are in nearly every country that needs help, and they’ve sent a small team to Japan. You can offer a donation online.
One of the things I’ve notice is that, unlike the Red Cross, they don’t allow you to earmark funds for a certain cause, which is actually MSF’s stated policy. It made me realize that as people who want to support organizations like these, it may actually make much more sense to spread out donations over time for multiple causes.
As an economics major, it is what I call the Permanent Income Hypothesis of Charity. Instead of making large one-time donations in response to disasters, perhaps we all can, in response to tragic events like the one in Japan, pledge to regularly give an equal amount of money over time. This would allow organizations to have funds and resources before disasters, as well as provide them with a steady and certain amount of income. Smooth income leads to optimal expectations leads to better results.
I have a lot of topics I want to cover during Spring Break, so stay tuned.
Posted on March 17, 2011, in Humanism, Politics and tagged charity, disaster, Doctors without borders, Earthquake, income smoothing, Japan, medecins sans frontieres, nuclear reactor, permanent income hypothesis, radiation, rescue, tsunami. Bookmark the permalink. Leave a comment.