I have always been curious on whether homeless individuals act rationally. The example I am about to explain favors the irrational side, but a few cases can be made that the individual in question acted rationally.
Here is the example that just occurred recently …
Tonight was garbage night, and I placed my green garbage bin and my blue recycle bin outside for pick up around 6:30 pm. The weekend before I had accidentally dumped some recyclables into the green garbage can, but not enough for me to sort through and to place them in the correct bin. Only a few beer bottles were on top of the inside of the pile of garbage bags in the bin. (I apologize to my environmentalist friends, there was no monetary benefit for me to gather and place the recyclables in the correct bin, nor did I have an incentive to negate the negative fuzzy feeling from not completing the ritual of recycling).
As such, my bins were outside for pick up in a an urban area location of Sacramento that has a lot of street and pedestrian traffic. Only a few hours later, 9 p.m., when darkness fell, did I notice outside a male individual on a bike going through my bins. Both bins were open and it seemed as if the individual was about finished scavenging through both bins. Seeing the green garbage bin opened surprised me (*read more below). The individual ought to know that the green garbage bin is dedicated to garbage and ought to be ignored for his search for recyclables. Yet both were opened and I was curious if the individual scavenged my incorrectly sorted recyclable beer bottles.
Once he left, I went outside in the dark to investigate. The inside of the opened green garbage bin looked completely different than when I last saw it last. I sorted around the bin (with plastic protection!) to try find my unsorted beer bottles. I could only find one, and it was not the brand of beer that matched what I noticed that was still left in the bin the last time I checked. Still, my investigation verified that the individual scavenged through my garbage bin. (My guess is that the individual scavenged 3-4 beer bottles).
My knee jerk reaction to this behavior is that this individual acted irrationally. The individual should have instead dedicated all of his time finding all the blue recycle bins and capitalize on the bins with the already sorted lucrative recyclables (cardboard and paper seem to be seldom collected by the homeless for its low recycle value). In my opinion, the time scavenging through the green bins seem to be less profitable and time consuming. Time ought to be dedicated solely to the finding and scavenging from blue bins.
Yet my assumptions of my conclusion could be suspect. I assumed that the individual had a fixed amount of time to collect recyclables for that neighborhood for that night. Also, I assumed that the individual could not scavenge the neighborhood the entire time period from when households placed their bins on the street and when the garbage men pick them up. I doubt that all homeless are night owls. My other assumptions were that households rarely mixed their recyclables with their garbage and that no considerable competition existed among the homeless for these neighborhood recyclables.
Now, I could be convinced with anecdotal evidence that my assumptions are invalid and that this homeless individual acted rationally. It could be that the individual had a low opportunity cost and had no concern of exhausting their effort on scavenging in the green garbage bin. And this low opportunity cost could be that the individual had no time constraint and could work the entire time the bins were out. Also, if in fact households did not sort all their recyclables and for whatever reason placed their recyclables in both bins on the street then a rational homeless individual would search both.
The motives for why households would not actively sort their recyclables may be unknown, but a household might mix their garbage to maximize their garbage pickup capacity (e.g. after a big party with an excess amount of empty alcohol containers). Or a household might not dedicate themselves to sorting their recyclables and only place their blue recycle bin alongside their garbage bin because of moral environmentalist pressure from their neighbors. Lastly, scavenging could be competitive by having many homeless individuals scavenging for recyclables thus making time of extraction and supply of recyclables scarce. Yet this last explanation would conflict with my argument that an individual should dedicate their efforts and time solely on the blue recyclable bins since it would be assumed to have a higher payout.
So who knows if the homeless act rationally? All I know is that after thinking about this problem I figured out how to measure how dedicated communities are in recycling: ask a local homeless person that specializes in recycling.
*The action of leaving the bins could have been a signal to other individuals that this area has already been scavenged. This leads to other questions I have regarding the homeless society of their internal laws, property rights, how to settle disputes, etc. I am not saying that I want to write a dissertation about the behavior of the homeless but I think this is a fascinating topic.
Nick Janusch looks at everything from an economist’s perspective. For more, visit his blog, “Appreciate Yourself“