Conversation Starters: "Million-Dollar Murray"

Monday

"Million-Dollar Murray"

Malcolm Gladwell's 2/06 New Yorker article opens with the story of Murray, a homeless man in Reno who rotates fairly regularly among the street, the hospital, and shelters. His medical bills may be the highest for any individual in Nevada. He costs the state an enormous sum of money.

Policies toward the homeless tend to be constructed as though all homeless required the same available services; there need to be shelters, emergency care, and food for all of them. Such blanket policies necessarily imply that how much each homeless person "costs" is distributed normally, that is, on a bell curve, with a large majority accounting for most of the costs and a few that are very or very-not costly.

Recent research on homelessness, though, says different. The costs of aiding homeless men and women shows a "power-law" relationship: a graph that looks like a hockey stick, with a few people accounting for the majority of the costs, and most people costing very little. Most homeless individuals, it turns out, are homeless for a very short time, and only once. Only a very few are "chronically" homeless and riddled with costly addictions, etc. From the standpoint of efficiency, it would be most cost-effective to house, feed, employ, and treat those few chronically homeless "for free" rather than pump money into less-comprehensive services for everyone. This may not be politically popular, of course.

A similar situation inheres in car emissions. Emissions checkpoints and stickers assume that all cars need inspection, and administering such tests is extremely costly. In reality, car pollution falls in a power-law relationship; most cars emit very little. The better solution, then, would be for police to use an infra-red detector (which exists) to check the emissions of cars exiting highways, say. Drivers of cars above approved levels could be pulled over and ticketed (or whatever). The point is, addressing the few rather than regulating the many. That's the way to handle power-law relationships. We don't yet think of homelessness as one of those.

Labels: economics, gladwell, homelessness