The joys of cash benchmarking

From the article:

If cash is so great, why don’t we shut down all other charities and just give everyone cash?

Consider the Against Malaria Foundation, the flagship effective altruist charity for global health and development. Sub-Saharan Africa isn’t suffering from some crippling insecticide-treated bednet shortage that can only be remediated by foreign donors. If you give people money, they could buy insecticide-treated bednets with it. Why give to the Against Malaria Foundation and force them to get a bednet whether they want one or not?

Well, one very consistent bias people have is undervaluing preventative health care. You’ve likely experienced this yourself. Have you ever procrastinated for months on getting your flu shot, only to come down with the flu and then lie in bed alternately vomiting and cursing yourself for your own laziness? In general, people don’t seek out preventative health care unless it is required (such as through a vaccine mandate) or made very easy for them (such as purified water coming automatically from your faucet)—even when they would very much like not to get sick. Since preventative health care happens long before you get the disease, sometimes you don’t get sick even if you don’t get preventative health care, and if preventative health care works it seems like nothing happens, you tend to think that you can skip it and you’ll be fine.2

Similarly, people in the developing world tend to undervalue insecticide-treated bed nets. In one study, a 55-cent increase in the price of a bednet decreased takeup by 23 percentage points (not 23%, 23 percentage points). It’s not that poor people in Africa don’t care whether they get malaria—they’re willing to pay more than 55 cents to treat their malaria once they already have it. But just as you irrationally avoid stopping by the pharmacy for your flu shot, many poor people in Africa irrationally don’t buy malaria nets.

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I’m not saying that any of these charities definitely outperform cash. But they all plausibly do. You can probably think of dozens of other charities that also plausibly outperform cash. The lesson here isn’t “nothing outperforms cash, be a nihilist” or even “you have to do cash-benchmarked randomized controlled trials of all your charities or handsome statisticians won’t love you.” The lesson is that, unless you have a plausible story about why a charity outperforms just giving the beneficiaries some money, you shouldn’t do it.

For most of my readers, who neither have the capacity to run cash-benchmarked randomized controlled trials nor handsome statisticians to court with them, cash benchmarking is most useful as a thought experiment.

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If you do anything with your altruistic dollars other than find the poorest person you can and give them money, you should have an explanation for why this is better than finding the poorest person you can and giving them money.