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The first results from the biggest basic income experiment

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Re: The first results from the biggest basic income experiment

#111

Post by ethanbond »

bee_rider wrote: post #71
ethanbond wrote: post #56

Earlier quoted context omitted.

Rents are set by only two things: 1) the tenant markets’ ability to pay and 2) competition with other landlords. If every single landlord knows with certainty (2) that every single tenant in their market has increased their ability to pay (1) by $1000/mo, then every landlord independently will come to the conclusion that they can raise rents by $1000/mo. They know the tenants are able to sustain it, and they know oth…

The landlords will still be in competition, anyone who breaks with the conventional wisdom will have an easier time getting tenants. It would probably raise prices, but the laws of supply and demand don’t just go away.

Huge amounts of the demand just moves $x up the price curve, but that doesn’t suddenly conjure supply into existence, so you have the same demand willing to pay higher prices across the same supply: that’s just higher prices. In HCOL areas the vast majority of rent prices stem from land rent, and that supply is not just less elastic than demand, it’s totally fixed.

Most insidiously: the demand that will move most aggressively up the price curve is lower income people seeking better lower/middle income housing. So those prices will move the fastest.

Re: The first results from the biggest basic income experiment

#112

Post by AaronM »

ethanbond wrote: post #90
AaronM wrote: post #66

Earlier quoted context omitted.

Can you point to a single reputable study that shows this would likely happen?

You need a study to see that rents are highest where income is highest and that rents rise as incomes rise?

Yes, just because you say its so doesn't make it so.

There should be studies that show when minimim wage or welfare/other forms of assistance increases that rent follows.

Re: The first results from the biggest basic income experiment

#113

Post by bee_rider »

MagicMoonlight wrote: post #88
bee_rider wrote: post #44

Earlier quoted context omitted.

UBI is universal, as others have said. There’s also the concept of “guaranteed minimum income,” which, I believe, just tops you up to the minimum income amount if you make less. In comparison, guaranteed minimum income seems much more difficult to administer (means testing and all that), and it seems like it would incentivize bad habits, in the sense that if you make less than the threshold, why not just quit your jo…

If it’s given to everyone then you’re going to be subsidising the wealthy while cutting support for the poor. Supporters want it because they dream of playing xbox all day. If it’s given to everyone then taken away based on income, that’s just a stupider version of the current system. We already give people support based on need, so why would we get rid of that just to circle back? Just make the support better if the…

I don’t think it is obvious that it will have to come at the cost of cutting support for the poor. At least, we’d save a bit by not having any administrative costs.

It could also de-politicize this sort of support, and avoid embarrassing wastes of money, like the time Florida decided to spend more than they saved by drug testing welfare recipients.

Projects that help everyone seem easier to sell politically.

Re: The first results from the biggest basic income experiment

#114

Post by underlipton »

BuyMyBitcoins wrote: post #47

It seems to me that every basic income ‘experiment’ is flawed because they don’t account for the externalities of higher taxes and the fact that the pool of recipients is limited enough that the market is unaffected. Giving a few thousand people a few thousand a month isn’t going to cause much on an impact on inflation and it’s not going to make rents go up across the market. Additionally, others outside the experime…

You neglect to mention who the higher taxes would be on. I presume that the UBI isn't taxed, so in the near term, at least, such a regime would merely be reversing the upward wealth flow that we've seen since 2008. I'm fine with that, are you?

Re: The first results from the biggest basic income experiment

#115

Post by randomdata »

DFHippie wrote: post #106
Ajay-p wrote: post #46

Earlier quoted context omitted.

But that is derived from profits from the sale of Alaskan oil. It is not a wealth redistribution program, increased taxes, or reductions in spending elsewhere. Alaska is also a very costly place to live. It's also the only state that actually sells something and makes a profit which it can redistribute to its citizens. Maybe if America as a whole profited from the sale of its natural resources then it could, in theor…

The point of a UBI is not to redistribute wealth. It's to provide a minimum standard of living for everyone more efficiently than means-tested programs do. If you're going to provide a minimum standard of living to everyone, a UBI does this with minimal distortion of incentives.

> The point of a UBI is not to redistribute wealth.

Right, technically the point is to redistribute the productive capacity of that wealth so that everyone has access to a minimum amount of its production.

But is there a meaningful difference? For all intents and purposes, capturing a share of the production is equivalent to owning a share in the wealth.

Re: The first results from the biggest basic income experiment

#116

Post by ethanbond »

AaronM wrote: post #112
ethanbond wrote: post #90

Earlier quoted context omitted.

You need a study to see that rents are highest where income is highest and that rents rise as incomes rise?

Yes, just because you say its so doesn't make it so. There should be studies that show when minimim wage or welfare/other forms of assistance increases that rent follows.

https://www.sciencedirect.com/science/article/abs/pii/S00941...

> Increases in state minimum wages significantly reduce the incidence of renters defaulting on their lease contracts by 1.7 percentage points over three months, relative to similar renters who did not experience an increase in the minimum wage. This represents 10.6% fewer monthly defaults. However, this effect slowly decreases over time as landlords react to wage increases by increasing rents.

Re: The first results from the biggest basic income experiment

#117

Post by underlipton »

MagicMoonlight wrote: post #78
geysersam wrote: post #68

Earlier quoted context omitted.

I definitely agree the experiments are flawed. But I'd like to raise that there also are positive effects that are not accounted for. You mentioned the impact on market prices, I think the impact on prices would be net positive, because the market would become more inclined to provide products and services for people with lower incomes, where every marginal spent dollar has a much higher impact on overall well being…

If you’re getting £1000 extra a month and I say your rent is now £1000 extra a month, you can’t and won’t say no. If you say no, I’ll just get someone else in who will give me their free money. As you’re competing with them for the same goods, you’ll have no choice but to pay the same. Meaning it’s made no difference for you as the primary costs in your life are limited by supply. For someone who owns their own house…

That's unrealistic. If it's purely supply and demand, the premium landlords will be able to command out of that 1000 bucks will be somewhat less than the total - and perhaps significantly less, if prospective tenants are savvy enough to hold out collectively. The only way you see the entire thing co-opted for rent is if landlords were to collude and refuse to break rank on pricing. But there's no way that would happen, since it'd be illegal.

Re: The first results from the biggest basic income experiment

#118

Post by Ajay-p »

jnwatson wrote: post #92
Ajay-p wrote: post #46

Earlier quoted context omitted.

But that is derived from profits from the sale of Alaskan oil. It is not a wealth redistribution program, increased taxes, or reductions in spending elsewhere. Alaska is also a very costly place to live. It's also the only state that actually sells something and makes a profit which it can redistribute to its citizens. Maybe if America as a whole profited from the sale of its natural resources then it could, in theor…

Huh? The Alaska permanent fund comes from mineral royalties, which is literally a type of tax.

Royalties are not really a tax like taxes on citizens are.

Re: The first results from the biggest basic income experiment

#119

Post by danenania »

ethanbond wrote: post #110
danenania wrote: post #86

Earlier quoted context omitted.

I'm talking about the effects of wealth redistribution vs. money supply expansion. Redistribution doesn't necessarily increase prices since the total amount of purchasing power in the market doesn't change. It's certainly not as simplistic as "rent gets increased in proportion to the amount of the UBI" as you're implying.

Taking into account redistribution , the story is even more bleak, not less. Lower income housing prices will rise faster than higher income housing prices.

Why? What makes prices go up given a constant money supply?

Re: The first results from the biggest basic income experiment

#120

Post by bee_rider »

ethanbond wrote: post #111
bee_rider wrote: post #71

Earlier quoted context omitted.

The landlords will still be in competition, anyone who breaks with the conventional wisdom will have an easier time getting tenants. It would probably raise prices, but the laws of supply and demand don’t just go away.

Huge amounts of the demand just moves $x up the price curve, but that doesn’t suddenly conjure supply into existence, so you have the same demand willing to pay higher prices across the same supply: that’s just higher prices. In HCOL areas the vast majority of rent prices stem from land rent , and that supply is not just less elastic than demand, it’s totally fixed. Most insidiously: the demand that will move most ag…

You are making a lot of predictions from basic principles and very simple models, I’d be amazed if the market was really that simple.
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