doing good midterm 1

four themes from economics

• scarcity + tradeoffs

• focus on causality

• indirect effects

• predicting choices

scarcity + tradeoffs theme

how do you decide priorities and allocate resources?

focus on causality theme

microcredit in el salvador, was it really helping or would the beneficiaries would have made progress without it?

indirect effects theme

externalities, pecuniary, social norms

pecuniary

relating to money or financial matters, often involving economic incentives and market reactions.

predicting choices theme

Economists build simplified models to predict behavior, knowing that humans are trying to act in their own interest — but that “interest” is shaped by emotion, mental effort, limited attention, and imperfect information.

2/3 average game takeaways

1. we all operate in “systems”: our choices change others’ choices, which change our choices, etc

2. should vs actual

three mottos of the class

1. let hope, fear, theory inspire questions, add evidence to guide actions

2. generalizing widely is never a good idea

3. we agree on more than we realize

effective charities formula

A x B

A = choosing good ideas

B = implementing them well

evidence of effectiveness levels

0: only description of actions

1: % of money that goes to programs

2: delivered xx to yy ppl at cost of $zz

3: level 2 + lives get better

4: level 2 WHICH CAUSED lives to improve (causation rather than potentially just correlation)

child in a lake dilemma

does the bystander have a moral obligation to jump in the lake to save the child?

reasons to give

• analytical/philosophical

• selfish

• practical triggers

analytical/philosophical reasons

include ethical considerations, such as duty and justice, that inform decision-making about charitable giving.

selfish reasons for giving

gaining social status, tax benefits, or personal satisfaction from helping others.

practical triggers reasons for giving

are tangible incentives that motivate individuals to donate, such as community needs, fundraising events, direct appeals, emotional trigger, proximate

types of nonprofits

1. club

2. research/advocacy

3. service delivery

club nonprofit

donor gives and receives benefits

ex) church, local symphony

research advocacy nonprofit

meaningful metrics harder to quantify

ex) environmental organizations, public policy groups

service delivery nonprofit

meaningful metrics viable to quantify

ex) food banks, shelters, healthcare providers that deliver direct services to those in need.

social norms + giving goals

people believe they should give more than they actually do

giving pledge

charitable campaign to encourage wealthy people to contribute a majority of their wealth to philanthropic causes

who signs giving pledge

no inherited, some expanded, more self-made

what determines non-profit success?

if they can tell a good story, not necessarily if they’re truly having positive social impact

donors and research

most don’t do research, and those who do are just looking at facts/figures

drivers of giving

prefs: altruistic/self interest, etc

budget: based on what they can afford

obstacles of giving

market failures, behavioral failures

market failure obstacle to giving

hard to tell which nonprofit is effective, hard to see tangible impact of ur donation

behavioral failure obstacle to giving

• plan to give, but forget

• problems are far away / not urgent

• “i should give but i want a new phone”

• ppl say they care but they don’t act

• is the charity worth it? trustworthy?

solutions to obstacles to giving

better charity information, reminders, social influence

quality information aggregators

• foundations (ex: gates)

• public platforms

• mirror/mutual funds (ex: effective giving portfolios)

cost effectiveness definition

a measure of impact per dollar spent on an intervention for a particular population

cost benefit analysis ratio

Monetary value of all benefits divided by total social cost

cost effectiveness summary

• one outcome (cost per life, etc)

• outcome is anything measurable

• always comparing

CBA summary

• many diff outcomes (improve grades AND lower crime)

• outcome must be converted into dollars

• not necessarily direct comparison

cost effectiveness advantages

• don’t have to monetize everything

• CBA ethically problematic (wealthy ppl earn more when healthy)

• better for comparing within sectors (which malaria prevention strategy is best), makes allies

cost benefits advantages

• choose across causes (build school vs prevent malaria)

• deal w multiple outcomes

efficient solution

it’s made so that nobody can be made better off without at least one person being made worse off

market failure x efficiency

happens when two+ ppl wanna trade but can’t since there is obstacles

ex) free improvement

equity solution

ex) one person owns 99% of farms, not equitable but perhaps efficient

mechanisms creating market failures

• info asymmetries

• transaction costs

• tragedy of the commons

• public goods

• externalities

• competition

• behavioral

gov. solutions to market failures

• subsidies

• taxes

• address info asymmetry

• antitrust policies

why subsidize

• redistribute resources away from already wealthy

• address market failure that idea/model is not supported enough

• support early stage ideas

for-profit business creates impact how

1. production (employee treatment, externalities)

2. consumption (consumer welfare, targeted pricing)

corporate social responsibility

The practice where businesses integrate social and environmental concerns in their operations and interactions with stakeholders. It often focuses on ethical behavior, sustainability, and community engagement.

additionality in for profit impact models

Ensuring that the business or investment creates additional social or environmental impact that wouldn't have happened otherwise.

main idea of drowning child

We should help people in need, even far away, if we can do so at little cost to ourselves—just like we’d save a nearby drowning child.

How are the Drowning Child and Expanding Circle ideas connected?

Both argue that moral action shouldn't depend on proximity or similarity; we should help others based on need, not closeness.

main critique in vox stanford article

Donating large sums to wealthy universities is inefficient and overlooks more impactful philanthropic opportunities.

effective altruism view of AI

prevent “intelligence explosion” and so donate more money towards AI research

psychic numbing

As the number of people suffering grows, our emotional response and willingness to help diminish.

empathy + numbers

ppl are more likely to help when shown one story instead of a bunch of numbers

USAID cost effectiveness

wants to maximize impact per dollar spent

How can businesses address public goods-related market failures?

providing or supporting services that are non-excludable and non-rivalrous, often in partnership with governments or NGOs.

tragedy of commons vs public goods market failure

both are non-excludable, but commons is rivalrous and public goods are not