What kind of currency units do beggars want?

by on June 21, 2010 at 8:17 am in Economics | Permalink

Akshay asks me:

Given that there are more coins and coins are worth more in London, with gbp1 and gbp2 coins, would you expect panhandlers to do better or worse? I would guess that people are less likely to part with their change and give it to beggars, whereas in the US people generally hate carrying around coins… And they are worth a lot less.

On the other hand, when they do get donations, the amounts are probably higher.

You can ask a comparable question about tips.  In the Eurozone, one works pretty hard to avoid a steady accumulation of coins.  The twenty cent piece feels worth less than does a U.S. quarter, because it competes for pocket space with the one- and two-euro coins. My intuition is that, adjusting for the size of tip or donation, in Europe or the UK small-denomination transfers are more common, which means that people with lower values of time end up sorting the coins.

1 Cliff June 21, 2010 at 9:09 am

People tip in the Eurozone?

2 babar June 21, 2010 at 9:25 am

when/how does begging move to the internet / electronic payment?

3 jimi June 21, 2010 at 9:43 am

babar, Craigslist.

4 Ed Dolan June 21, 2010 at 10:11 am

You should include Latvia in your study of coin behavior. Their currency unit, the lats, is large, .71 lats to the euro, larger than the GBP. However, their coins are tiny compared with UK. The 1 lats coin is about the size of a US quarter, but worth about $2 US. US visitors find it natural to leave a 1 lats coin on the saucer to tip for a cup of coffee, more than a 100% tip, and it is equally easy to toss a half a lats to a guy playing the accordion in the park. BTW, the Latvian 2 lats coin, which is hefty and looks like it is worth something, is the most beautiful coin in Europe. Most countries have things on their coins like weapons, killer wildlife, dead authoritarian dictators, or living powerless monarchs. The 2 lats coin has a lovely picture of a cow.

5 Bryce June 21, 2010 at 10:17 am

The predominance of small transactions is somewhat countered by the relative lack of 99¢ pricing, and the inclusion of tax in the price. It is far less common to require change for a €5 purchase than a $5 one.

6 charlie June 21, 2010 at 11:04 am

“In the Eurozone, one works pretty hard to avoid a steady accumulation of coins.”

Wow. Tyler hasn’t been there long, has he.

7 IVV June 21, 2010 at 11:15 am

Incidentally, one other issue is that the lack of a $0.02 coin and the very low level of use of the $0.50 coin means that Americans carry around a lot more coins for less value.

8 Donald A. Coffin June 21, 2010 at 1:00 pm

So how does this fit into the common observation that stores in Europe tend to have an insufficient quantity of small change on hand? (Which I think was, in fact, a topic of discussion on this blog a year or two ago.)

9 Anthony June 21, 2010 at 2:12 pm

Liberalarts – I do that, approximately. I generally don’t give any coins when I’m paying cash. Every day when I get home from work or whatever outings I’ve been on, I dump my change into a plastic candy box. When it gets full (which takes several months), I roll the coins and put them into another box. When that box gets full, I take them to the bank. The candy box holds about $70 of coins. Over several years of doing this, I’ve deposited over $1200 of coins.

10 Matt June 21, 2010 at 3:39 pm

I’ve always wondered how the spread of electronic payments has affected begging. I for one often find myself truthfully telling beggars I don’t have any change (or cash), because I rely on my debit card.

Matt in London

11 John Faben June 21, 2010 at 7:45 pm

Sam, by “about $5”, you actually mean “about $2”, right? (ie, last time I bought one, it was £1.50). I only say this because this seems like the sort of discussion in which rounding up to the nearest $5 might sensibly be frowned upon.

Incidentally, the Big Issue is very strongly related to the passage about rent exhaustion in Discover Your Inner Economist on how to give away money when you’re in India without encouraging begging… (legitimately) selling the Big Issue is a strong signal that you’re the sort of homeless person that I want to donate money to.

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