The interchange test and the thrifty poor myth

One of the ways a person is asked to generate sympathy and empathy for those in a predicament is by requesting them to put himself/herself in the other person’s shoes. The general hope is that by doing so, the person understands the unique circumstantial constraints and challenges that the other person faces and is thus kinder to the other person.

My personal impression has been that the majority of these exercises are farcical and that they’re often rigged deliberately to only generate positive rather than negative empathetic responses. For, what if I try putting myself in the other person’s shoes and discover that I would have behaved in a totally different way, one that I consider superior along various metrics to the way the other person behaved? In such cases, the usual temptation is to dismiss my exercise as superficial, biased, insensitive, and ill-informed. But if the goal is simply to agree that the other person behaved in a manner that was appropriate and in some sense necessitated by circumstances, why carry out the farce in the first place?

On the other hand, there is good potential insight that can be gleaned by putting oneself in another person’s shoes — as long as attempts to bias the results one way or the other are kept to a minimum. I’d guess that the probability that such genuine exercises would give “politically correct” answers would be fifty-fifty. One simple approach is the interchange test — put yourself in the other person’s shoes and simultaneously put the other person in your shoes.

DISCLAIMER: Note that the examples I give here are simply to illustrate this process and other people may come to different conclusions based on their direct experience and their knowledge and interpretations of large scale data.

The lazy white collar worker and the hardworking blue collar worker

Anecdotal observation might suggest that white collar workers (people working in more “brainy” jobs) are more lousy at sticking to deadlines than their blue collar counterparts. Further, the lousiness seems to increase the higher up the braininess scale you go. When it comes to software projects or writers or researchers, meeting deadlines is a rarity. Students are known for postponing things to the last minute and not getting them done even then — the so-called student syndrome. Compare this to the typical conscientious blue collar worker who turns up for a job every day on time. Hey, the blue collar worker knows how to keep deadlines, and the white collar worker doesn’t! Ergo, all the prejudice against blue collar workers being somehow lazier or less conscientious is wrong.

Here, a little interchange test might help. What happens if a blue collar worker is thrust into a white collar job? Would the blue collar worker generally perform as well as the white collar worker? Since it’s hard to imagine being many different people at once, here is a simpler question that can be judged through empirical observations more easily. What kind of things do people generally find harder — switching out of a day-to-day blue collar job to engage in academic work, or switching out of academic work to engage in a day-to-day blue collar job? What do people generally find harder — switching out of a simple clerical job into a managerial position, or switching out of a managerial position into a clerical job?

This observational version of the interchange test has strongly suggested to me that switching to brain-based work is in general harder than switching out from it. Note that this isn’t to say that all body-based work is easy — definitely, becoming an athlete (which also requires some brains — see this, referred to here) isn’t. But my surmise would be that the typical conscientious blue collar worker is able to keep deadlines better because it is easier to keep deadlines. Further, for those parts of the jobs of white collar workers that involve the keeping of simple deadlines, I suspect that on average they perform better than blue collar workers. This is not to deny that there is a significant variation in conscientiousness among both kinds of workers, so individual counterexamples are easy to find. (Note also that I am approximately conflating blue collar with low-skill, an approximation that is mostly valid; though there are exceptions — some jobs in building construction may be blue collar in a technical sense but may require considerably more skill than the typical clerical job).

This should not be confused with saying that somebody in a high-demanding white collar job would like to switch to a blue collar job. Certainly, blue collar jobs are unpleasant, partly because they involve mean and nasty employers breathing down your neck.

The thrifty poor: myth or fact?

The contempt that the rich hold for the poor is all too well known. Of course, not all poor people are the same — there are often distinctions between the honest, conscientious poor and the “tramps” to whom money given is like water on a duck’s back. But people have argued, as I did here and here, that, on average, the rich probably do enjoy certain advantages over the poor that go beyond money — advantages that probably include greater intelligence, greater conscientiousness, and better experience with the specific mechanisms needed to operate in a money-based society.

Yet, on the other hand, there is also a grudging admiration for the poor — hey, after all, they are managing to survive with less money, so, by the very fact that they are doing it, they must embody the virtues of thrift. Ergo, the poor must have certain qualities and special skills that the spoilt rich have failed to develop, give that they rarely had to worry about paying for the next meal (in a developing country poor context) or paying off their mounting credit card debt (in the developed country poor context).

While there is certainly some plausibility to this, it is by no means as foregone a conclusion as it appears. First, conspicuous consumption induces some obvious biases. We are liable to identify people who conspicuously consume as being richer than they are, but this automatically biases us into the conclusion that richer people spend more money than they actually do (because we underestimate the wealth of those rich people who aren’t engaging in conspicuous consumption to the same extent). See also these two earlier posts.

Back in 1962, in a seminar paper titled irrational behavior and economic theory, Gary Becker argued that people behaving very irrationally could still lead to outcomes very close to a rational behavior outcome. One of the mechanisms he identified was that people may simply run out of money. Not having money (and lacking the ability to buy stuff on credit) forces you to forego consumption however profligate a person may be.

On the empirical side, Abhijit Banerjee and Esther Duflo show in their seminal paper economic lives of the poor that poor people across the world spend a lot of their money on entertainment and festivals, even though there are often parts of the year when they have to make do with less food than they would like. Whether this is because they are making a conscious and far-sighted tradeoff by foregoing food for entertainment or whether this is irrational on their part is a moot point. However, it does suggest that the majority of poor people are not making the most significant and systematic efforts to manage their money to climb the ladder of health and wealth in the long term.

The interchange test might work here. Consider a number of poor people whom you encounter on a day-to-day basis. Make a list of all the things they do, including all the items they spend money on. How many of these items would you spend money on if you were in their financial predicament? Or, look back to the times when you were tight on money. How was your spending pattern similar to and different from that of the poor people who you see around you? If this “other person’s shoes” approach seems too hard, try something simpler: look at the people who have become less poor (or more rich) over time. How do their spending patterns differ from those of others?

My rough surmise would be that the poor are neither uniquely profligate or ill-suited to make their own financial decisions, nor are they extraordinarily thrifty. In most respects, the poor are a lot like the rich — but the averages would not be identical, and they would come out worse for the poor on most measures. Thus, my conclusion warrants neither paternalistic pity nor a (it seems to me) misplaced admiration for the virtuous thrift of the poor at large.