Tag Archives: field experiment

Basic income pilot in Finland, headed by top economist

Via MarginalRevolution’s assorted links and others, a short BBC article about a pilot project in Finland on universal, basic income. Economist Ohto Kanninen, coincidentally a fellow student of mine from graduate school, describes the project:

The prime minister has expressed support for a limited, geographical experiment. Participants would be selected from a variety of residential areas.

Mr Kanninen proposes testing the idea by paying 8,000 people from low income groups four different monthly amounts, perhaps from €400 to €700.

They also have the Prime Minister on board:

Prime Minister Juha Sipila has praised the idea. “For me, a basic income means simplifying the social security system,” he said.

This sounds really exciting, and I cannot wait to see the working paper.

 

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The hedonic treadmill exists even for basic necessities

Does people’s life satisfaction adapt to material improvements? In a recent paper (gated), Galiani, Gertler and Undurraga find that it does, even in a case of very poor people receiving a really basic service (housing). In a large-scale experiment, some poor households in El Salvador, Mexico and Uruguay were randomly selected to receive a ready-made small house. Receiving such housing increased the share of households reporting to be “satsfied” or “very satisfied” with the quality of their life by around around 40 %, from 0.53 to 0.73, thus confirming that it was something these households really needed. What about the effect in the long term? Eight months later, more than half of the gain had disappeared, highly consistent with the hedonic treadmill hypothesis.