Hobo Economicus

We collect data on hundreds of panhandlers and the passersby they encounter at Metrorail stations in Washington, DC. Panhandlers solicit more actively when they have more human capital, when passersby are more responsive to solicitation, and when passersby are more numerous. Panhandlers solicit less actively when they compete. Panhandlers are attracted to Metrorail stations where passersby are more responsive to solicitation and to stations where passersby are more numerous. Across stations, potential-profit per panhandler is nearly equal. Most panhandlers use pay-what-you-want pricing. These behaviors are consistent with a simple model of rational, profit-maximizing panhandling.

That is the new paper by Peter T. Leeson and R. August Hardy.

Comments

Leeson's got the best paper titles in Econ since An-arrgh-chy.

yo is spot on!

My first thought after knowing there is a paper like this was: "There is too much of my taxes going to useless grants".

However, there is no mention of grant support in this paper (preprint?).

Econ papers are rarely funded by grants, thank undergrad and MBA tuition instead

I think it's understandable - the paper clearly shows that panhandlers with an MBA should earn far more than illiterate beggars.

It's the networking what makes the difference, guv'nor.

Too much of my taxes going to prop up high default rate student loans instead?

Among the most effective panhandlers are development officers and government lobbyists for universities.

On the flip side, how do bankers (oilmen, tech bosses, etc.) react, positively or negatively, to their panhandling with politicians?

That's not panhandling, its just old fashioned graft.

It annoys me, and should annoy everyone, with the distinctions made between what poor people do to get by and what rich people do to get way ahead. It annoys me that this blog pretends that rich people don't panhandle.

They don't

from politicians? The tech folks used to be libertarians, or stayed out of politics until the Clinton administration went after MS for anti-trust. Which was dropped as soon as MS set up shop on K street to pay into the machine. Of course when they pay into it they want some returns on their investment.

Silicon Valley was seeded by the Defense Department for much of the 20th century (see HP, Intel, etc). Facebook even got CIA money. They are libertarian up to a point. Like farmers or Wall St bankers, every one talks about spending government money wisely until its their turn at the public trough.

Facebook got CIA money? I thought that was Oracle.

Bonus trivia: the only time I got panhandled in DC was at Union Station metro, which is an Amtrak station bringing lots of happy tourists and out of town folk into DC, consistent with the model.

Maybe we will be able to figure out in about 75 years who got cia money. Maybe. Remember bcci?

You know what I would absolutely crave? Hard data on low-end/high-end gross for this type of "economic" activity cross-referenced for geography and other data points.

You always hear these urban myths of the panhandler who owns a benz and I've heard some stories of professional beggars in some coastal communities that were able to scrape just under the average state wage if they knew what they were doing.

I look at GoFundMe as somewhat related. If you can figure out a way to turn sympathy into an economic strategy, you can make out like a bandit just busking.

I saw the same panhandler every day for years at the elite East coast university where I attended grad school. Then one day I saw him at a local, high end vitamin boutique. He was on a first name basis with the staff and he was buying $200 worth of vitamins. Not a sensible 2 year bulk supply of vitamin D and C, but trendy stuff like CQ10. He put in hours and hours at the university, was there 6 days a week, and to me he seemed wiry and strong in his late 50s, and was seemingly without mental disabilities. I still remember his pitch (1000x a day): “for food not alcohol.” Effective apparently.

So either important supplements or stuff that merely results in expensive pee.

Does CQ10 actually work?

I they get less than $7.25/hour form passers by is it illegal?

Actually, inside DC, it is $13.25 er hour.

https://www.minimum-wage.org/district-of-columbia

The DC Metro has a project to record by video and through AI identify those buying the services of panhandlers, and in the end sue them for paying less than minimum wage. Paid for by a HUD grant! File under: no good deed goes unpunished.

I'm guessing you are not too familiar with Metro, at least inside the actual stations - this is the system that arrests kids for eating a banana or french fries.

Or does this - 'Metro Transit Police are being criticized for excessive use of force after a video posted Tuesday showed an officer pushing and tripping a high school student, knocking her to the ground, after she refused to throw away a bag of potato chips and a lollipop.

............................................

According to the arrest report, the incident happened just after 6:30 p.m. Tuesday. Police said the teenager was on the paid side of the fare gates, holding a bag of potato chips, and an officer told her to put the food away.

Metro bans customers from eating or drinking on trains and in stations.

The police report said the teenager “responded with a defiant ‘No!’ ” Police then told her twice that she would need to leave the station if she didn’t put her food way. When she refused, the arrest report said, the officer reached for her wrist and placed handcuffs on her.' https://www.washingtonpost.com/local/trafficandcommuting/metro-transit-police-arrest-teenager-for-carrying-chips-and-lollipop-into-station/2016/10/19/1360a014-9627-11e6-bb29-bf2701dbe0a3_story.html?utm_term=.1437c73b87db

And if there was ever a grant, it would be from DOT - Metro is a rail system, and has nothing to do with housing or urban development.

Oh look, another one of clockwork_prior's tangential moralistic stories.

Or just pointing out that DC Metro is one of the strictest run transit systems on the planet, using a current example.

But then, one assumes you too have little experience of Metro, otherwise you would know that this 'moralistic' story has been repeated over decades. And you would also be familiar, as regular Metro riders tend to be, about how the station attendant uses the monitoring cameras and PA system to tell someone to put away their banana - something that have been true for over a generation at this point.

As Steve Sailer has pointed out, correctly, DC Metro is an AA program in disguise. A disgusting system, but it helps keep our rentals fully occupied since we have units near the stations.

Bonus trivia: Metro trains are not operated by humans but by a computer, been that way for a generation or more now, and when I tell this to people they don't believe it. The train operators are there to open the doors only.

Why are you interrupting my Friday BS with lengthy facts?

Shouldn't you enjoy some in season Apfelwein by now? Or are you too far from Frankfurt?

Too far from Frankfurt in German terms, though by American standards, Frankfurt is pretty close.

This region prefers Apfelmost (which is a somewhat broad term). Though also a name for Apfelwein, in this region it lacks that interesting balance between sour and sweet, and is considered quite different.

The other thing interesting in this regard is that Apfelmost really does have a season. Apfelwein is not really a seasonal thing, in comparison.

'Most panhandlers use pay-what-you-want pricing.'

Pricing?

They gain a price for their service, sure. Their service is a small bump in your empathy reward center, or a feeling of pleasure in your conscience. The pay what you want pricing is up to the consumer of these feeling bumps, a person can pay proportionally to how much of a feeling they want in return.

this bump you found in your empathy reward center is that a hypothetical bump or is it a real bump?.
wouldn't it be reasonable to think some people give to panhandlers
even though some panhandlers are annoying and some of them are
running meme zombie scams. there might be more to it than
than whacking the reward center

https://www.wwaytv3.com/2018/10/25/police-naked-woman-tries-to-bite-off-mans-genitals/

looks like we are gonna need more brain scans

When a beggar says "Hey pal, I need 10 bucks to get home, could you please help me?" it's fixed pricing. When he says "Sorry, I'm hungry - could you lend me some money?" it's pay-what-you-want pricing.

"Figure 2"
Incredibly mind numbing

"Beggars, it turns out, can be choosers—and they appear to be rational ones."
really clever punch line

I always give $$ to street musicians. Better music, less expensive, more convenient, and smaller crowds than going to most overpriced concerts.

During rush hour there are always panhandlers by the streets in Philadelphia. I've seen them make ten or fifteen dollars in just a couple of minutes while I was stopping at a red light. I've always wondered how they get dibs on their properties.

This all seems so obvious and unworthy of note. "Panhandlers go where there are more people to panhandle, and they take what people give them." I wonder if they set out to prove something more interesting and ended up having to publish their null result.

Hey. It's "consistent with the model."

IOW, "We have not clearly shown that we are wrong."

This paper kind of felt gross to me. I get the jokes, and it has some clever execution, I guess, but it ended up just feeling like kind of an exercise in smug, rather than revealing something interesting or unexpected about the world.

Tip for those who are considering rounding out their bottom line with some lunch-time panhandling or for academics who didn't publish enough: get a paper cup. Set it in out in front and sit back and wait. Or it you are the more go-getter type, approach people (giving you the chance to provide the service of going away), but hold out the cup (not your hand). Science proves that you'll reap greater profits this way.
This should not be construed as a substitute for a pitiful appearance. Practice makes perfect.

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