What You Can Do

On one level, recessions are about numbers, like the post I just wrote about the November statistics. On another level, recessions cause enormous hardship and misery to real families. I know most of us have less wealth than we did a year ago, since two major sources of household wealth – stocks and housing – have fallen steeply in value this year. But even if you don’t feel like you can afford to donate as much as usual to charities, there is still something you can do.

Most middle- and upper-income American households have lots of stuff. Many of us, particularly adults, have lots of clothes and other things we rarely or no longer use. You can think of this either as a behavioral phenomenon (people don’t like to get rid of things, even if they cause more disutility by taking up closet space than any utility they will ever provide) or as a market failure (it’s too much of a hassle to get rid of things, so we keep them). But if you just take a day, identify the things you will never use again, put them in bags, and drive them to a local shelter, you can help allocate those goods to the people who value them most. Or, as non-economists put it, you can help people. And, of course, you can get a tax deduction (the shelter in my town recommends using the Salvation Army valuation guidelines), which is itself probably worth more to you than those clothes you will never wear again.

3 thoughts on “What You Can Do

  1. Good post. I also like to keep things even I dont use them.I think one should definitely donate to these charities now and then.

    Regarding the behavorial phenomenon, you are exactly right. I personally dont think it is a market failure….

  2. This is a great idea, but I wonder how to achieve the greatest impact through clothing donations? Is it better to donate directly to a homeless shelter, or instead donate to Goodwill or the Salvation Army, who would sell the clothing in their thrift shops? What about business suits in great condition, that no longer fit? What about business casual clothes that have minor signs of wear, but don’t look crisp enough to wear to work? What about stuff that’s worn out, but better than nothing?

  3. Actually Mr. Kwak I lost nothing in the stock market because I sold everything a year and a half ago (it’s great being a New Keynesian), and surprisingly home prices have been fairly stable where I live (Hockessin, Delaware). My house only has a tiny mortgage and is a little large for me, and my ex-significant other is the only other person living here. Nevertheless it is crammed to the rafters with unused furniture and clothing (I inherited most of it when I inherited the house). I’ve been planning to donate a good chunk of it but have been distracted by economic events. I’ll try and get off my keyster. One charity for clothing donations that I would recommend (my parents used to contribute to them) is the Cancer Federation. (Oddly, absolutely nobody in my family has ever had cancer.)

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