The value(s) of a dollar

Joseph's recent post reminded me that there was an important point I should have emphasized more in the ongoing food and food security threads.

One of the main reasons social safety nets work is that, while the nominal value of money remains the same, the impact value (the difference in quality of life that a dollar makes) varies greatly from the top to the bottom of the income scale. For example, if you were in the top quartile, there is a very good chance that you would not even notice a $20 or $30 increase in your weekly food budget, while if you were in the bottom quartile, that same $20 or $30 could make a world of difference in terms of health and hunger. This is why a relatively small level of income redistribution can produce a substantial increase in aggregate quality of life.

This is also why the food stamp challenge and other similar initiatives can be so dangerous. The trouble with high-profile, upper-class activists trying to show how difficult it is to live on a program like food stamps is that these activists have fully internalized these upper-class perceptions of the impact value of money. They don't have the skill set to work with these small sums and they don't have the world view that allows them to understand their relative value.

Though the intentions are unquestionably good, the effect of these initiatives is to suggest incorrectly that these social safety net programs do little good and that incorrect belief can do a great deal of harm.