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> The marginal value of a tax dollar is greater to someone who makes less than I do than it is to me. Perhaps you mean marginal utility? Strictly in terms of

> The marginal value of a tax dollar is greater to someone who makes less than I do than it is to me. Perhaps you mean marginal utility? Strictly in terms of value, the wealthy tend to trade that dollar for assets rather than consumption. Marginal value of any dollar is higher when it generates a return. If you do mean marginal utility, there is a strong philosophical position that interpersonal utility comparisons are not meaningful. Diminishing marginal utility holds for any one person, but subjective preference and merely ordinal (rather than cardinal) preference confounds any attempt at interpersonal comparison.

rosser 12y ago
Yes, I meant marginal utility. I think it's going to take rather more than a "strong philosophical position" to convince me that 1/100000 is somehow not bigger than 1/100000000.
genericuser 12y ago
I think he was trying to talk about MPC. http://en.wikipedia.org/wiki/Marginal_propensity_to_consume http://en.wikipedia.org/wiki/Marginal_propensity_to_consume
tunesmith 12y ago
I'm curious what the philosophical position is that says that $1,000 is not worth meaningfully more in value or utility to a poor person than an equity fund manager, and why that position would be described as "strong".
- RickHull 12y ago
  There is no known measurement of utils and good reason to believe there never will be. Our strongest insight into subjective preference is revealed preference. Without action, preference is not revealed, and where preference is revealed by action, we can only know that one preference is higher than another -- ordinal. We cannot determine that one preference is, say, 10x higher than another. These are the limitations of utility analysis for a single person. Diminishing marginal utility holds for a single person, and it ought to hold for interpersonal comparisons ceteris paribus, but of course ceteris paribus is a logical impossibility for interpersonal comparison given subjective preference. To hold ceteris paribus for two people is to assert they are the same person, and we're back to diminishing marginal utility for a single person. Our only guide to interpersonal utility comparison is intuition, which is easily confounded. There is no way to say that my number one preference has more utility than yours, and we have even less reason to say anything meaningful about my number X preference compared to your number Y preference.
  - rosser 12y ago
    I don't think there are many people suggesting that a poor man's dollar has 9.7438393 times more utility to him than does a rich person's. The question is one of more or less not how much more or less. Trying to frame it that way is a distraction, if not a straw man. So, to clarify your position: absent some specific ratio, is a single dollar worth more to a person of modest means than it is to someone wealthy? Or is even that degree of comparison meaningless in your estimation?
    - RickHull 12y ago
      I'm afraid you've misunderstood. I said that we cannot even determine more or less: > There is no way to say that my number one preference has more utility than yours == Ninja edit in response to clarification ninja edit: == That is correct. We have no reason, other than intuition, to believe that a dollar is "worth more" to a poor person than a rich person. I can easily give some counterexamples: * Poor person is a monk * Poor person believes in barter rather than purchase * Poor person has no counterparties that accept dollars * Poor person has material needs satisfied * Poor person has wacky preferences Even if you want to try to hold external circumstances equal, several of these examples show the dollar to be equally worthless to both parties. Separately, the fact of internal circumstances being subjective -- unable to be held equal -- confounds attempts at comparison.
      - rosser 12y ago
        All of your counterexamples seem to me to be speciously unlikely, and so under-representative of reality that I honestly find myself wondering whether you're trolling. Let me ask the question even more pointedly: to whom would the unexpected receipt of $1000 be more beneficial, a single, paycheck-to-paycheck mother who drives a '90s Accord, or the scion of a squillionaire tycoon, trying to decide between different colors of leather for his new Ferrari? Do you still maintain those things can't be compared?
        RickHull 12y ago
Iftheshoefits 12y ago
This has nothing to do with interpersonal utility comparisons. It has everything to do with the very real, undebatable fact that ratios with smaller denominators are larger than ratios with larger denominators provided that the numerators are the same.
- RickHull 12y ago
  > It has everything to do with the very real, undebatable fact that ratios with smaller denominators are larger than ratios with larger denominators provided that the numerators are the same. Tautologies are true, and identities necessarily hold. You are saying that a single dollar is a larger portion of a smaller net worth than that of a larger net worth, I gather. Of course this is true. The relevance remains unclear. It's the next step that is treacherous.

rosser 12y ago

Yes, I meant marginal utility. I think it's going to take rather more than a "strong philosophical position" to convince me that 1/100000 is somehow not bigger than 1/100000000.

genericuser 12y ago

I think he was trying to talk about MPC. http://en.wikipedia.org/wiki/Marginal_propensity_to_consume http://en.wikipedia.org/wiki/Marginal_propensity_to_consume

tunesmith 12y ago

I'm curious what the philosophical position is that says that $1,000 is not worth meaningfully more in value or utility to a poor person than an equity fund manager, and why that position would be described as "strong".

RickHull 12y ago
There is no known measurement of utils and good reason to believe there never will be. Our strongest insight into subjective preference is revealed preference. Without action, preference is not revealed, and where preference is revealed by action, we can only know that one preference is higher than another -- ordinal. We cannot determine that one preference is, say, 10x higher than another. These are the limitations of utility analysis for a single person. Diminishing marginal utility holds for a single person, and it ought to hold for interpersonal comparisons ceteris paribus, but of course ceteris paribus is a logical impossibility for interpersonal comparison given subjective preference. To hold ceteris paribus for two people is to assert they are the same person, and we're back to diminishing marginal utility for a single person. Our only guide to interpersonal utility comparison is intuition, which is easily confounded. There is no way to say that my number one preference has more utility than yours, and we have even less reason to say anything meaningful about my number X preference compared to your number Y preference.
- rosser 12y ago
  I don't think there are many people suggesting that a poor man's dollar has 9.7438393 times more utility to him than does a rich person's. The question is one of more or less not how much more or less. Trying to frame it that way is a distraction, if not a straw man. So, to clarify your position: absent some specific ratio, is a single dollar worth more to a person of modest means than it is to someone wealthy? Or is even that degree of comparison meaningless in your estimation?
  - RickHull 12y ago
    I'm afraid you've misunderstood. I said that we cannot even determine more or less: > There is no way to say that my number one preference has more utility than yours == Ninja edit in response to clarification ninja edit: == That is correct. We have no reason, other than intuition, to believe that a dollar is "worth more" to a poor person than a rich person. I can easily give some counterexamples: * Poor person is a monk * Poor person believes in barter rather than purchase * Poor person has no counterparties that accept dollars * Poor person has material needs satisfied * Poor person has wacky preferences Even if you want to try to hold external circumstances equal, several of these examples show the dollar to be equally worthless to both parties. Separately, the fact of internal circumstances being subjective -- unable to be held equal -- confounds attempts at comparison.
    - rosser 12y ago
      All of your counterexamples seem to me to be speciously unlikely, and so under-representative of reality that I honestly find myself wondering whether you're trolling. Let me ask the question even more pointedly: to whom would the unexpected receipt of $1000 be more beneficial, a single, paycheck-to-paycheck mother who drives a '90s Accord, or the scion of a squillionaire tycoon, trying to decide between different colors of leather for his new Ferrari? Do you still maintain those things can't be compared?
      - RickHull 12y ago

Iftheshoefits 12y ago

This has nothing to do with interpersonal utility comparisons. It has everything to do with the very real, undebatable fact that ratios with smaller denominators are larger than ratios with larger denominators provided that the numerators are the same.

RickHull 12y ago
> It has everything to do with the very real, undebatable fact that ratios with smaller denominators are larger than ratios with larger denominators provided that the numerators are the same. Tautologies are true, and identities necessarily hold. You are saying that a single dollar is a larger portion of a smaller net worth than that of a larger net worth, I gather. Of course this is true. The relevance remains unclear. It's the next step that is treacherous.