You are quite right, utility is usually steep near 0, and flattens out toward the top.
I was simply pointing out that if the author is right, the difference between 10k and 15k would be very small (indeed, quite possibly smaller than that between 100k and 150k).
In fact, I'd suggest that diminishing returns explains American "poverty" much better than flat utility curves. 45% of the poor own their own home, 95% are not overcrowded, 75% own a car (30% own 2 cars), nearly all have a TV (25% a big screen). Virtually no one is starving, over 70% of those the USDA classifies as "hungry" are obese. The typical poor family is also supported by 16 hours/week of work. It's quite possible that poverty is explained simply by a low marginal gain from increased work (the poor already hit the point of diminishing returns).
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You are quite right, utility is usually steep near 0, and flattens out toward the top.
I was simply pointing out that if the author is right, the difference between 10k and 15k would be very small (indeed, quite possibly smaller than that between 100k and 150k).
In fact, I'd suggest that diminishing returns explains American "poverty" much better than flat utility curves. 45% of the poor own their own home, 95% are not overcrowded, 75% own a car (30% own 2 cars), nearly all have a TV (25% a big screen). Virtually no one is starving, over 70% of those the USDA classifies as "hungry" are obese. The typical poor family is also supported by 16 hours/week of work. It's quite possible that poverty is explained simply by a low marginal gain from increased work (the poor already hit the point of diminishing returns).
All numbers are taken from here (http://www.heritage.org/Research/Welfare/bg1713.cfm), who in turn stole them from the census. See also this chart http://www.heritage.org/Research/Family/images/Chart1.gif of working hours for poor families.
I've actually gone from $10k to $15k once (technically $12 to $17) and it was humongous.