Social Econ Blog

For much of the past 15 years, I've lived in locations with lots of panhandlers. As such, I've been forced to consistently struggle with the question of whether or not to succumb to their entreaties. Ultimately, I've developed a strict policy against it. An important step in this process was the day I sat perched in a window above Harvard Square with a great view of the panhandler at the CVS across the street. As my friend and I sat there watching him, we started doing a rough calculation of his wage (we were both labor economists after all). For simplicity, we assumed an average contribution of a quarter and then we simply counted the number of people who gave. After about an hour of watching, we were stunned. This panhandler was easily making over $15 per hour.

Steve Levitt highlights a passage which points out that panhandlers in NYC make even more:

“Don’t take this the wrong way, but I feel a little funny, since you guys pay out of your own pockets. Do you know how much we make out here, panhandling, during rush hour?’

“No, how much?”

“About a dollar a minute.”

“Oh.”