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The double whammy of being poor – making less and getting charged more
- geoffwoo 11y agoCool to see screenshots of price discrimination in practice
- ericglyman 11y agoThanks man! Was pretty surprising when we first saw it, but have seen since that lots of sites now serve different prices/coupons depending on the device you use to access.
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- pkaye 11y agoThe question is what kind of price discrimination is this? Do we attribute browsing/shopping on the phone to be being poor?
- gluelogic 11y agoI'll tell you one thing I don't attribute to being poor, and that's buying clothes from Banana Republic. I wonder how much of their total traffic comes during the work day, from office computers.
- jacquesm 11y agoThere are many examples of this and some even more direct: poor people have to deal with debt collectors more frequently out of necessity and as a result end up paying both their original debt+whatever the debt collectors tack on. In many cases the added on part is larger than the original debt. Then there's buying quality products that last longer by the wealthy and crappy products that need to be replaced (far) more frequently by the poor and many more examples like these.
- briandear 11y agoDebt collectors are a result of using credit or spending being one's means. There are plenty of poor people that don't buy a 60 inch TV from Best Buy and then default on the payment. A huge portion of debt collectors are collecting on things like department and electronic store credit cards. The ability to manage money (even if you don't make much of it) is not unique to just the rich. There's a big difference between being poor and being irresponsible. Most debt collectors are the result of being irresponsible.
- venomsnake 11y agoTotally agree with you. It was very irresponsible for the department and electronic store to issue credit cards. They obviously didn't manage and evaluate the risks.
- smt88 11y agoWould you like to back up your statements with facts? The major point that you're failing to argue against is this: poor people often must use loans to live their day-to-day lives. It doesn't matter what proportion of bad debt is the result of poor people and what proportion is due to financial ignorance. The point is that poor people suffer by requiring loans. Do some research on payday loans and car-title loans. These are some extremely exploitative lenders taking advantage of people who aren't able to make ends meet.
- Mz 11y agoThe last statistics I saw indicate that more than half of all bankruptcies in the U.S. were due to high medical bills. This held true regardless of insurance status. Our medical system is broken and if you have a health problem, you get hit with the double whammy of high medical bills and lowered productivity. In most cases, it has nothing to do with being irresponsible.
- rhino369 11y agoWhat I saw was that half of all bankruptcies involved some medical bills. The number actually caused by high medical bills is a lot lower.
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- refurb 11y agoDid I miss something? The deal was only offered via the website and not via mobile. What does that have to do with being poor?
- Mz 11y agoLots of poor people are online via smartphones, not desktop computers. That's how.
- refurb 11y agoIf they had shown some data to back that up it would have been nice. I've heard anecdotally that's true, but I've never seen data. I've also heard about the price discrimination that goes on based on the browser (Safari = user with $$$). Are we sure it wasn't just that?
- Mz 11y agoYears ago, I took a college class called Homelessness and Public Policy. I am also currently homeless and have been on the street for more than 3.5 years. I think that is about as poor as you can get in the U.S. I bought two tablets to go homeless. I currently own a tablet and a laptop. But I assure you I am really weird for a homeless person. Tablets are not normal on the street. Cell phones, including smart phones, are very normal on the street. I can't give you precise figures and this is not a formal survey. It is firsthand personal observation. I spent six months in downtown San Diego participating in various homeless services programs. This exposed me to dozens or hundreds of other homeless individuals at a time. (The participation at one of the meal sites was upwards of a hundred individuals per day and I participated in that regularly for about six weeks.) Does that work for you? (Sincere and respectful question.)
- gluelogic 11y agoThat was my reaction to the article as well. In my perspective, the coupon is considered as optional information and is not shown on the mobile site for the obvious reason that it simply wouldn't fit. To me it reads like a conspiracy theory about something that was really a simple design decision.
- ams6110 11y agoParibus: I've never heard of you. I don't know what you do. You have no link to your website on your blog.
- ericglyman 11y agoHey -- didn't want to distract from the article. Just added in two hyperlinks to our homepage. We were part of the YC Summer 2015 Class. Link to our homepage here: https://paribus.co/ https://paribus.co/
- marcoperaza 11y agoA few problems with this article: 1. The absurd proposition that it's unjust that you will find a better deal if you spend more time looking for one. Of course you will. 2. The claim that e-commerce is a regressive tax on the poor because purchases are bigger percentage of the poor's income. You can say the same thing about any purchase. A burger is a bigger percentage of a poor person's income than a rich person's income. Paribus is providing a great service, but this is a marketing/PR article pretending to be serious economic commentary and analysis. It's just hopping on the bandwagon of a narrative that's politically en vogue (that the world is stacked against the poor).
- PhasmaFelis 11y ago> They're trying to take advantage of a narrative that's politically en vogue (that the world is stacked against the poor). Are you seriously implying that this is a mere matter of opinion? Sociocultural disadvantage is what being poor means, for as long as mankind has measured wealth. Certainly there's disagreement about what should be done about that, if anything, but the fact of the situation is not in doubt.
- pkinsky 11y agoA cause can be moral, and right, and successful, and still attract shills attempting to jump on the bandwagon. I'm gay, I'm really happy with how LGBT rights are progressing, but that doesn't mean I have to like it when Frito-Lay rolls out a line of rainbow Doritos. (http://www.csmonitor.com/Business/2015/0918/Doritos-releases-rainbow-chips-in-support-of-LGBT-pride http://www.csmonitor.com/Business/2015/0918/Doritos-releases...)
- ericglyman 11y agoHey Marco, Thanks for the kind words on the service. On your feedback, here's my take: 1. Stepping back, isn't it more absurd that people are, by default, charged more unless they spend significant time dealhunting? The claim is not that the disparity itself is unjust, just that it's time for this to come to an end. 2. For all of the biggest e-Commerce players (Amazon, Walmart, etc.), their biggest business lines (and ones where they're investing the most) are in the sales of basic necessities (food, household goods, etc.). So considering how dynamic pricing will impact people (esp. re: basic necessities) is important. I'm not sure why you're dismissing the key point so quickly -- if we care at all about helping bridge the income divide, we should care about helping the poorest get the most affordable prices. In any case, I wrote the article because it really did shock us. Joe is a real person and a friend and we hope it does some good to show a small slice of what we're seeing.
- deleted 11y ago[deleted]
- thadd 11y agoInflation- the secret tax
- vacri 11y agoCharacterising this as "the 1%" is a disservice to the concept. You don't have to be "1%" wealthy to do what's in the article. Also, I question "The wealthy build a better sense of when prices are low and deals are good." - the poor are very aware of how much their food costs, for example. Wealthier people aren't, because they're not counting pennies. A question illustrating this, taken from Yes Minister: "How much is a pound of margarine?" The really wealthy, the 1%, aren't going to have a good idea. But the poor are aware of the costs of their staple foods. The underlying point of the article isn't a bad one, but extrapolating "this dude orders clothes sight-unseen from his smartphone every two weeks" into "the poor have it so tough" is a strange path to take.
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- yummyfajitas 11y agoThe article misrepresents the federal reserve study it uses to make it's case. It claims that the federal reserve study implies rich "have more leisure time so they get to know prices and deals well". But this is nonsense. The federal reserve study doesn't study rich and poor at all - it studies the unemployed vs employed. Specifically, the article shows that unemployed people spend less time shopping than employed people. Is the article really claiming that unemployed people have less leisure time? In fact, the article actually claims that reduced working time causes a (small) drop in shopping time.
- ericglyman 11y agoYou're straight up wrong. Read the piece. Quote below: "For instance, total shopping time for households with an income between $100,000 and $150,000 (category 5) is 5 to 7 minutes greater (per day) than average shopping time by an individual in a household with income in the $0 to $24,999 bracket (category 1). After controlling for various individual characteristics (column I), this is robust to including both time and state (columns II and III), as well as labor force status dummy variables (column IV)."
- yummyfajitas 11y agoFrom the article: "The results indicate that a 1 minute decline in market hours is associated with a 0.04 minute decline in shopping time." The correlation between income and shopping time is simply not caused by leisure time. This should hardly be surprising - leisure and income are inversely correlated (i.e., the poor have lots of leisure, the rich very little).
- shkkmo 11y ago> leisure and income are inversely correlated (i.e., the poor have lots of leisure, the rich very little). Do you have any data for that? I rather doubt that it is very solid if it exists at all. There are a large number of poor people working more than two jobs and more hours than the rest of the "middle-class". Additionally, many of the jobs from the upper end of the middle-class tend to often require longer working hours.
- bane 11y agoI was reasonably poor once (even did a stint homeless living out of a motel). The basic assertion: you make less and end up being charged more is in a sense "correct". For example: if you're poor, you'll probably shop at a discount retailer and buy discount or knockoff clothes, which will fall apart and need replacing faster than if you had just bought more expensive clothes. Over time, the replacement costs will add up and you'll "pay more" for clothes. Another example: if you buy in bulk, you can get some items cheaper, but poor people tend to buy in small quantities (e.g. cigarette and alcohol "singles" are a phenomenon that only exist in poor areas for example) This all sounds kind of stupid, but there's a rationale for it that makes sense from the inside, here's a scenario: I just paid rent, I have $100 left in my bank account and payday isn't for 2 weeks. I work a physical labor job and my work boots need replacement. Do I? a) Buy the $29.99 on sale boots at Walmart and hope they last for a couple months? b) Buy the $259.99 boots at the high-end boot store and they'll last for a couple years? c) Buy the $84.99 boots at the discount shoe store and they'll probably last for 6 months to a year? Of course the answer is a). This leaves me with $50 to eat on for two weeks. I can't afford b) no matter what so it may as well not exist and c) leaves me starving before payday. You count pennies when you're poor, you know exactly how much small amounts of things cost because you spend all your time buying small amounts of things and balancing out the bottom few rungs of Maslow's Hierarchy of Needs against your daily purchases. Getting out of this cycle is very hard. It's not like you can save up enough to be worthwhile. Even with $5/mo left over at the end of every month, it takes 52 months to save up to buy the b) boots. This means also that you live in a constant state of emergency. Literally everything is an emergency -- and this short circuits your ability to prioritize and make what seems like rational decisions. It also means that whatever spare money/time you have you may as well spend on stupid bullshit because you've convinced yourself it won't make any difference anyway. It really is a vicious cycle.
- yummyfajitas 11y agoIf this theory is true, then there should be some category of goods where the poor spend more than the non-poor. What category of goods is it? http://www.bls.gov/cex/2014/combined/income.pdf http://www.bls.gov/cex/2014/combined/income.pdf
- shkkmo 11y agoI agree with the point that this article makes and think we should be discussing the questions article tries to raise. However, the article is a poorly written piece of PR. It makes several mathematical errors, mis-represents the study on shopping time, and fails to provide any evidence to back up it's critical point of "e-commerce today acts like a regressive tax". Why is this crap on HN?
- frogpelt 11y agoThe example I've noticed is the poor person who doesn't have means for transportation will usually go to the closest source for staple items, like a convenience store. Milk and bread are 50-100% at these stores versus a traditional grocery store and they rarely put things on sale.