3 ms·
Yes, I think that's true, although the magnitude of the effect is hard to determine, and I think is likely to be very small. If the average purchaser of a part
by andrewla 8y ago
Yes, I think that's true, although the magnitude of the effect is hard to determine, and I think is likely to be very small.
If the average purchaser of a particular class of good (say, eggs) is making 10xUBI post-tax, then getting one unit of UBI in addition to their base salary shifts the demand curve enough that you'd expect to see a price increase proportional to that increase -- so a dozen eggs goes from costing .05xUBI to .055xUBI, purely as an economic rent.
But for a person making less than the average salary, like 2xUBI or 0xUBI, their egg-purchasing power increases dramatically. A 2xUBI person previously could afford to buy 40 units of egg, and can now afford 54 eggs, a 36% increase in their buying power.