Here are some observations from a blogger:
"The recent earthquakes in Haiti and Chile present an interesting contrast between the deleterious effects of a major earthquake in one of the richest countries in the western hemisphere and in the poorest. It may surprise you that Chile is (by relative standards) quite an advanced and relatively wealthy country as many Americans, I think, have a tendency to view all of Latin America as a poor region. According to the CIA, the per-capita GDP in Chile in 2009 was $14,700 while Haiti was $1,300 - so while Chile is far from US or Western European standards of living, it is a much wealthier country than Haiti. In both cases the earthquake (and subsequent tsunami in Chile) were devastating disasters, but the scope of the tragedy in Haiti was, it appears, much, much worse."
These observations pass two serious thinking to me:
1. Other than physical demand, people's level of immaterial demand can also be determined by income or wealth; and most of time, safety is not among the basic levels of human needs.
2. Opportunity cost for poor is less than rich people when they are facing the same danger and potential of losing. Who can stand more risk and unsafety, poor or rich? This is a two-way argument.
So the practical question is that, can we validate these observation via some statistical or econometrics methods?
Mar 3, 2010
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