The hot thing in charity seems to be simple non-means-tested transfers, like GiveDirectly. The logic is that the people receiving the money know what will best improve their lives. The logic and the empirical results of such transfers are compelling. At the same time, I find it difficult to reconcile with what I hear about lottery winners. I’m not sure if anyone has studied it, but one hears plenty of anecdotes on how the lottery has ruined a winner’s life. One way to reconcile these two ideas is that low-level cash transfers tend to benefit people while excessive cash transfers ruin them. If this ends up being correct, is there some kind of sweet spot (percent of yearly income) where an unencumbered infusion of cash is likely to benefit one maximally?

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