Much Ado About Nothing

28 March
2007

Much Ado About Nothing

Sometimes I hate celebrities

I stumbled on a "news" story today involving Jessica Simpson. Jessica had just given a new minivan to a Mexican orphanage (that she won from the MTV Music Awards, NOT something she bought herself). A noble gesture to be sure, but was it a news worthy event? One would think that Jessica would not even notice a minivan purchase on her bank statement based on how much money she makes. That gave me an idea. I decided to do the math...

A quick Google search uncovered what Jessica pulled in last year: $14 million according to Forbes. You can buy a 2007 Chrysler Town and Country in Southern California somewhere between $25,000 and $35,000 according to Kelly Blue Book. Based on my fuzzy math, Jessica handing over the keys to the highest end Town and Country Minivan ($35K) would be the equivalent of $116 dollars for someone making $46,326/year (median income based on the 2005 US Census). I have a feeling that if someone making $46K/year wins $116 in a contest, then gives those winnings to an orphanage, it would not even make the local paper. Just sayin'.

Posted by steve at 14:04 | Comments (1) | Trackbacks (0)

Comments

Re: Much Ado About Nothing

It's even less of a big deal than you make it out to be. The marginal utility of a dollar drops with the more money you earn (though it changes with your circumstances - like supporting more than yourself or the cost of livingwhere you live). If we're to assume that the $46K person is giving their last $116 earned, and Jessica Simpson is giving the last $35K she earned and apply the marginal utility of each dollar we'd almost certainly find that the $116 dollars is worth much more than the 35K.

That's a long winded way of saying that the $116 still has use for the person making 46K, but the $35K is virtually paper to the person making $14 mill.

Posted by: harper at April 05,2007 14:51

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