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My take on it: If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the m

by gridspy 15y ago

My take on it: If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear. As the price of the scarce resource increases, the poor get driven from the market. If the rich were not so rich, the scarce resource wouldn't be priced so high. This doesn't hold true for things which aren't really scarce, such as newspapers or software.

gnosis 15y ago
"If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear." This is actually not always the case. Food prices are a prime example. It turns out that the rich often pay less for food than the poor. Take a look at some of the conclusions of this study: "Do the Poor Pay More for Food? An Analysis of Grocery Store Availability and Food Price Disparities." http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%3F+An+Analysis+of+Grocery+Store...-a064059254 http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%... The researchers conclude that the poor do indeed pay more in the Twin Cities grocery market... In part, the poor pay more for grocery products because the stores that charge the lowest prices are not located in their neighborhoods. The study has overviews of a lot of other research that supports these findings. For example, In 1991, for example, New York's Consumer Affairs Department compiled a report on grocery store price-fixing in several neighborhoods (Freedman 1991). The report showed the poor paid more for groceries in inner-city neighborhoods, yet they received poorer quality foods and services. The report consisted of price surveys in sixty stores and 140 interviews in various New York neighborhoods.
- wanorris 15y ago
  Real estate, on the other hand seems like a classic example of a case where the concentration of wealth really can make poor people poorer, by crowding them out of more and more of the real estate market through gentrification. Of course, this depends on there being an actual scarcity of land. In areas where new land can easily be developed, it's much less of an issue.
  - gridspy 15y ago
    There might be plenty of land, but I think there will always be more desirable land. Either it is more central - better transport, trade, jobs. Or it is near a natural resource, for instance water - which provides fresh air, views, transport. The poor benefit as much (or more) than the rich do by having access to this better land.
csomar 15y ago
I think in an Open economy, it's almost impossible to generalize things. Your claim may be true in some situations, and wrong in others.

by gridspy 15y ago

gnosis 15y ago

"If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear." This is actually not always the case. Food prices are a prime example. It turns out that the rich often pay less for food than the poor. Take a look at some of the conclusions of this study: "Do the Poor Pay More for Food? An Analysis of Grocery Store Availability and Food Price Disparities." http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%3F+An+Analysis+of+Grocery+Store...-a064059254 http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%... The researchers conclude that the poor do indeed pay more in the Twin Cities grocery market... In part, the poor pay more for grocery products because the stores that charge the lowest prices are not located in their neighborhoods. The study has overviews of a lot of other research that supports these findings. For example, In 1991, for example, New York's Consumer Affairs Department compiled a report on grocery store price-fixing in several neighborhoods (Freedman 1991). The report showed the poor paid more for groceries in inner-city neighborhoods, yet they received poorer quality foods and services. The report consisted of price surveys in sixty stores and 140 interviews in various New York neighborhoods.

wanorris 15y ago
Real estate, on the other hand seems like a classic example of a case where the concentration of wealth really can make poor people poorer, by crowding them out of more and more of the real estate market through gentrification. Of course, this depends on there being an actual scarcity of land. In areas where new land can easily be developed, it's much less of an issue.
- gridspy 15y ago
  There might be plenty of land, but I think there will always be more desirable land. Either it is more central - better transport, trade, jobs. Or it is near a natural resource, for instance water - which provides fresh air, views, transport. The poor benefit as much (or more) than the rich do by having access to this better land.

csomar 15y ago

I think in an Open economy, it's almost impossible to generalize things. Your claim may be true in some situations, and wrong in others.