This week's econ talk comes from Michael Fay and paul neehous of give directly, an organization that gives cash to desperately poor people. All four were in graduate school studying economics at a time when they started applying the techniques from other fields such as randomized control trials. They decided giving directly was something that we wanted to do. And this simple idea, intuitive to some counter intuitive, worked surprisingly well.
Economic theory teaches that people make choices that provide them with the greatest benefit. So why not extend this idea to the realm of charity? Economists and social entrepreneurs Michael Faye and Paul Niehaus of GiveDirectly argue that giving people cash with no strings attached is the most cost-effective means of helping the poorest people in the world and their communities.