Luis Enrique, IMO, the relevant question is what sort of sacrifices and changes one would have to make in order to obtain these things, whether that means changing jobs or getting education, or skimping on other things in order to splurge on the occasional nice item (or nice private education, or whatever.) Depending on the situation, they’re not necessarily even more unobtainable.

For someone who is poor, since such a large percentage of the consumption basket is cheaper goods, then these sorts of changes make make the one or two expensive items more affordable, not less. Save enough at Wal-Mart and even if that high class item gets more expensive quickly, you still have enough extra left over in your budget to afford. The greater the proportion of one’s income that’s already spent on the more expensive goods, the more it becomes harder to afford those goods or to buy more.

Thus, the complaint to me seems to be more that it’s harder for the middle and upper middle class to keep up with the upper class by buying many expensive goods, rather than a complaint that it’s harder for those of modest means to continue buying a small number of expensive goods. It’s related to the old “are America’s rich falling behind the super-rich” complaint.

Luis Enrique, IMO, the relevant question is what sort of sacrifices and changes one would have to make in order to obtain these things, whether that means changing jobs or getting education, or skimping on other things in order to splurge on the occasional nice item (or nice private education, or whatever.) Depending on the situation, they’re not necessarily even more unobtainable.

For someone who is poor, since such a large percentage of the consumption basket is cheaper goods, then these sorts of changes make make the one or two expensive items more affordable, not less. Save enough at Wal-Mart and even if that high class item gets more expensive quickly, you still have enough extra left over in your budget to afford. The greater the proportion of one’s income that’s already spent on the more expensive goods, the more it becomes harder to afford those goods or to buy more.

Thus, the complaint to me seems to be more that it’s harder for the middle and upper middle class to keep up with the upper class by buying many expensive goods, rather than a complaint that it’s harder for those of modest means to continue buying a small number of expensive goods. It’s related to the old “are America’s rich falling behind the super-rich” complaint.

Perhaps, but not necessarily. It’s often more complicated. If I’m poor, then an iPod-like product moving from $200 to $300 makes it harder for me to buy it, but if I save over $100 on cheaper clothes from China, then it’s easier, not harder to partake in the iPod.

There are a lot of people of modest means who save by buying lots of cheaper products buy who splurge on the occasional expensive item, whether it’s an iPod, a nice car stereo and speakers, or nice athletic shoes. If expensive products all rise in price simultaneously faster than cheaper products, it might be easier to buy one or two expensive products but harder to buy them all– and that can promote consumption equality, not inequality.

Perhaps, but not necessarily. It’s often more complicated. If I’m poor, then an iPod-like product moving from $200 to $300 makes it harder for me to buy it, but if I save over $100 on cheaper clothes from China, then it’s easier, not harder to partake in the iPod.

There are a lot of people of modest means who save by buying lots of cheaper products buy who splurge on the occasional expensive item, whether it’s an iPod, a nice car stereo and speakers, or nice athletic shoes. If expensive products all rise in price simultaneously faster than cheaper products, it might be easier to buy one or two expensive products but harder to buy them all– and that can promote consumption equality, not inequality.

What’s the measure of inequality that matters? The fact that the living standards of the poor have moved closer to the rich, in so far as they can now afford more cheap food & cheap imports …or the fact that the rich person’s consumption basket has moved further beyond their reach. I lean toward the latter – I think this research shows inequality has increased.

What’s the measure of inequality that matters? The fact that the living standards of the poor have moved closer to the rich, in so far as they can now afford more cheap food & cheap imports …or the fact that the rich person’s consumption basket has moved further beyond their reach. I lean toward the latter – I think this research shows inequality has increased.

I’ll concede it’s possible that the size of the set means something for my well-being. It can feel good to have options (as you say, it can also lead to stress).

Actually it seems clear that it must mean something, and the question is to quantify the effect.

I think things come into play here which can be tough to analyze economically, e.g. “awareness”. If I don’t know or haven’t seen what I’m missing out on, it probably matters less to me.

I’ll concede it’s possible that the size of the set means something for my well-being. It can feel good to have options (as you say, it can also lead to stress).

Actually it seems clear that it must mean something, and the question is to quantify the effect.

I think things come into play here which can be tough to analyze economically, e.g. “awareness”. If I don’t know or haven’t seen what I’m missing out on, it probably matters less to me.

Nonetheless, it still seems plausible to me (and consistent with what limited evidence there is) that the size of individuals’ choice sets has an effect on “utility”, independently of the specific choice made. Being constrained in our choice sets is typically unpleasant and often quite stressful, even if we are constrained only to pick the option that we would otherwise have picked anyway.*

Imagine that the would be faster were actually unable to feed herself. She might be able to rationalise her not eating as politically righteous in exactly the same way as if she had chosen to fast (at least, let us suppose she can) – and yet she might still feel worse off because she also values the size of her choice set and resents not having the ability to choose. It’s then no longer the case that her utility is determined solely by her chosen bundle of goods: it’s determined both by the chosen bundle, and the choice set from which that bundle was chosen.

* Of course, sometimes being constrained in our choice sets can reduce decision stress, but that doesn’t detract from the point that unchosen options may be important in themselves.

Nonetheless, it still seems plausible to me (and consistent with what limited evidence there is) that the size of individuals’ choice sets has an effect on “utility”, independently of the specific choice made. Being constrained in our choice sets is typically unpleasant and often quite stressful, even if we are constrained only to pick the option that we would otherwise have picked anyway.*

Imagine that the would be faster were actually unable to feed herself. She might be able to rationalise her not eating as politically righteous in exactly the same way as if she had chosen to fast (at least, let us suppose she can) – and yet she might still feel worse off because she also values the size of her choice set and resents not having the ability to choose. It’s then no longer the case that her utility is determined solely by her chosen bundle of goods: it’s determined both by the chosen bundle, and the choice set from which that bundle was chosen.

* Of course, sometimes being constrained in our choice sets can reduce decision stress, but that doesn’t detract from the point that unchosen options may be important in themselves.

That, to me, is the deciding factor. The fellow’s well-being is still being determined by the utility he gets from his chosen bundle of goods (where “goods” I will concede needs to be expanded to include more intangible things). His well-being is not a matter of the size or nature of his feasible set, only of his choice within the set.

That, to me, is the deciding factor. The fellow’s well-being is still being determined by the utility he gets from his chosen bundle of goods (where “goods” I will concede needs to be expanded to include more intangible things). His well-being is not a matter of the size or nature of his feasible set, only of his choice within the set.

Sen argues extensively to the contrary in his work developing the capability approach. Pretty much anything of his in the area is likely to give the flavor of the argument. His most commonly-used example is the intuitive difference between someone who is starving because they can’t afford to eat, and someone who chooses to fast, though they have the means to do so. While the two have the same consumption, we are unlikely to consider them equally well-off, and Sen argues that the reason for this is that the faster has greater capabilities. (FWIW, I’m not sure this particular example necessarily demonstrates the point, but I nonetheless find it fairly plausible more generally.)