Many interventions seem to have the effect of “making people richer.” In addition to understanding the long-run impacts of prosperity, I am interested in looking in more detail at what happens when you make someone richer, and looking at a few examples to understand whether the intuitive model of a small across-the-board increase in real income is reasonable.
As a first example, I’ll look at cash transfers in the developing world. I think very similar ideas are needed for the analysis of many interventions in the developing world (e.g. health interventions) and also for many interventions in the developed world (e.g. supporting self-driving cars). But it seems useful to first go through the analysis with a particular case in mind. Read the rest of this entry »