Tuesday, February 26, 2008

Poverty Anecdotes and Cuba Memories

If I may veer off election topics for a moment while I'm try to figure out my own opinion about the housing crisis ...

There's a discussion ongoing involving Tyler Cowen, Brad Delong, and Megan McArdle about how poor Cuba is based on travelers' impressions and comparisons to the Dominican Republic and Mexico. I've been to all three places, and I think the whole exercise is a fool's errand. You just can't make statements about the welfare distribution in any of the three countries based on a highly non-random sample of observations.

I saw some pretty poor places in rural Cuba, but I've seen spots in northern Mexico and the DR that were about the same, and places elsewhere in Mexico that were much poorer; undoubtedly there are sections of the distributions of welfare in all three countries that overlap. But I couldn't have accurately guessed the poverty rate or median income based on those observations. The whole reason we do household surveys and collect other hard data is so that we don't have to rely on anecdotes.

An exception to the "anecdotal evidence is worthless for poverty measurement" rule applies to place where almost the entire distribution is dirt poor. In Haiti, for example, where 80% of the population survives on less than $2-a-day, your subjective impressions are not likely to lead you astray.

What stood out for me when I visited Cuba was the level of repression (and you don't need a household survey to know that). You see security forces on every corner, and the media is just like how I always imagined the Soviet press--loaded up with comically transparent propaganda. Also evident was the sheer volume of sexual tourism. In all the tourist zones, you see fat old foreign guys walking around clutching teenage Cuban girls. On the other hand, in Cuba I didn't see barefoot little kids begging on the streets, which is something you see in Mexico City and many Third World cities.

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