Hi Austen. You write:

Those "philosophers" wouldn't find it too demanding if they were the ones who were had to endure the suffering of the Third World. It's so wrong that people only put themselves in the shoes of the haves, rather than the have-nots when formulating their "morals".

Yes, Singer makes this same point in a reply to criticism from Colin McGinn (from Dale Jamieson (ed.), Singer and His Critics, Oxford: Blackwell, 1999, p. 304):

I disagree […] with the conclusion McGinn draws from his imaginary world in which a Charity Channel, plugged into our brain and therefore compulsory viewing, floods us with information about people in urgent need of our aid, which we have the means to provide effectively. McGinn says that he finds this a dystopian prospect. No doubt he is thinking of himself as a potential donor rather than as a person in urgent need of aid. From that perspective, the thought of being bombarded with images of people suffering is indeed dystopian. But if I imagine myself as a victim of a natural disaster, and think of my life and the lives of my family as being saved by the existence of the Charity Channel, I have a very different view.

Thanks for those clarifications, Owen. I understand your position better now.

Thanks, Martijn! Will is currently writing a book on effective altruism and is giving a lot of thinking to ways in which we can make EA ideas more appealing to a wider audience, without sacrificing precision or accuracy. Making such ideas more personal is a key way of accomplishing this, and for this reason the book will feature interviews with many prominent EAs and top researchers.

Hi Toby,

However, they are distributed over twenty years of that time and I think the amortization calculator you used assumes it is all paid as a lump sum on year one.

Yes, this is what I assumed. As I note at the end of my previous comment, I took the £150-200,000 figure to represent the present-value cost of having a child, rather than the unadjusted sum of payments that parents are expected to make over a 20-year period. I think I made that assumption because Brian's own estimates are adjusted for the time value of money. I agree that, if this assumption doesn't hold in this case, then the cost per parent per year is £3,000 (excluding opportunity costs).

Thanks for the reply. You write:

I'm not familiar with the theory behind the time value of money to appraise it, but it looks to me like your calculation here has taken my per parent figure and come out with a per couple figure, which (I'm sure unintentionally) makes it look at first read like my estimate is <50% of the true cost). But the figure of £4700 per couple is not wildly different from £4000 per couple per annum, given the uncertainty bounds I'd put on it.

No, sorry: I took the middle value of your £150-£200,000 estimate (£175,000) then divided this figure by two and used one of the many amortization schedule calculators found online to reach the £4700 figure, assuming a 5% interest rate and 50 annual periods. So £4700 is what each parent would need to pay at the end of each year, over the following 50 years, to cover the costs of having the child. (This assumes £175,000 is the present-value cost of parenthood, rather than the nominal cost.)

I have nothing to add to your comments about Brian's estimates, and I agree with much of what you write. I relied on those estimates because I knew of no better ones. I do however think that if you believe his calculations are inflated you should, if possible, use figures that match your own estimates, rather than no estimates at all. But I grant that this may be quite complicated, since the opportunity costs of parenting may be highly sensitive to factors that vary significantly among different people, as Brian himself acknowledges in his comment.

This is a very interesting essay addressing a very important decision EAs face. Thank you for writing it!

I think your estimates for the annual financial cost of having children underestimate the real costs, because they don't account for the time value of money and because they omit opportunity costs.

To account for the time value of money, we can use the formula used to calculate amortization in business. Assuming a present-value cost of £175,000, an interest rate of 5% and 50 periods, the annual cost for each couple turns out to be about £4,700 per parent per year.

To account for opportunity costs, we can use Brian Tomasik's estimates. He claims that the present-value opportunity costs of parenting are about $380,000, or £225,000. Adding this to the financial costs, we get a total cost of £400,000. Using the formula above, this translates into about £11,000 per parent per year.

However, as Brian notes in private correspondence, the opportunity costs could be much lower if parents outsource them. And parents persuaded by Bryan Caplan's arguments should be less reluctant to outsource these costs. So for you and Toby, and for many other EAs, the estimate is probably lower than £11,000.

Sorry about that. I'm currently working on fixing this problem.

Paul Christiano discusses this consideration in The best reason to give later:

I think the most important impact of giving now is probably that it accelerates the process of learning. At the level of the EA movement, the main reason to be optimistic about better giving opportunities emerging in the future is that we will actively seek out such opportunities, and discover through experience what directions are most fruitful to explore. (As an individual you can expect your money to go further if you wait and do nothing, but only because you can benefit from the work of others.)

However, I think that most causes that EAs currently donate to are not responsible for this learning, except indirectly for the reasons explored in the last section (e.g., giving to AMF is not a cost-effective way of learning in and of itself, but may facilitate GiveWell’s other activities, which are a big driver of current learning). A relatively small set of activities seems to be responsible for most learning that is occurring (for example, much of GiveWell’s work, some work within the Centre for Effective Altruism, some strategy work within MIRI, hopefully parts of this blog, and a great number of other activities that can’t be so easily sliced up). The argument I’ve given definitely doesn’t justify delaying any of this funding: I’m recommending delaying object-level do-gooding relative to learning, not delaying do-gooding altogether.

However, it may be that some of these activities produce info much more efficiently than others, and depending on the relative importance of funding and haste it may be worthwhile to stall some of these activities while the most important info-gathering proceeds. To me it currently looks like the value of getting information faster is significantly higher than the value of money, and on the current margin I think most of these learning activities are underfunded. A more serious concern is that there seems to currently be a significant deficit of human capital specialized for this problem and willing to work on it (without already being committed to work on it), so barring some new recruitment strategies (e.g. paying market wages for non-EAs to do EA strategy research) there are significant issues with room for more funding.

These issues seem important to me, and I’ll certainly return to them in future posts. For now, I’d leave it at: a small fraction of activities EAs fund are directly producing relevant info, and those are probably important and worth scaling up. However, the majority of EA funding does not fall into this category.

"Why not make a long odds bet with a wealthy counterparty or use high-risk derivatives to get a chance at making the large donation? In principle, economies of scale like this should always be subject to circumvention at modest cost."

Yes, as Paul Christiano writes,

In principle some opportunities might only be accessible for big donors. $1B might go more than a thousand times farther than $1M. But if we are really only interested in expectations, then we can always just take a 1000:1 bet and turn our $1M into a 1/1000 chance of $1B. This guarantees that there are no increasing returns to money.

See this post by Jeff Kaufman for a list of names that were in use before 'effective altruism' became established.