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Comment by lordnacho | Hacker News Reader

I read somewhere that there's also an issue with bulk purchasing. If you've got no money, you end up having to buy eg single cans of drinks instead of large bottles, small packets of washing powder, and so on for various ordinary items. That means you'd end up paying a lot more for a similar amount of stuff than someone who happened to have the money for the bulk.

The other end where it hurts is your ability to take risk. If someone low balls you on a job offer, and you're flat broke, you don't have any runway to find a better offer. You also can't take a short-term mortgage (tends to be lower at the front of the curve) and will probably have to lock in a higher, longer term. You can't hold a lot of investments because you'll end up having to liquidate them at a cost. So you keep your money in cash or cash-like instruments and inflation eats a bit, too.

"It's expensive to be poor" is actually a well known saying for good reasons.

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To the extent that a company can tell the difference between rich and poor customers, rich customers will get more freebies, discounts, and other benefits. That's because rich customers are worth more to a company in the long term. Poor people have to pay the full price up front.

That is just one half of the story.

Another equally applied strategy is market segmentation: Try to get a higher price for those who have the money, but sell at a lower price to those who otherwise couldn't afford your product. There is a somewhat popular article by Joel Spolsky on that topic:

http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...

Of course, those strategies don't exclude each other. If you can make some people pay more for your product, you can of course be "generously" give out free stuff, so they feel cared and hopefully don't notice the mediocre deal.

An example of this is pricing of flight trips and hotel accommodation depending on the browser used in the booking: if the client has an Apple product, he/she will be charged more.

Can you please elaborate? I've never heard of this.

See for instance

http://www.ibtimes.com/ripped-mac-why-apple-users-may-pay-mo...

Of course, pricing proposals could be different based on not just the browser variant, but also cookies, browser history, where you came from, etc.

http://www.usatoday.com/story/travel/columnist/mcgee/2013/04...

How is this discrimination? If you came to me and said, "hey gambiting, I want to buy a cookie from you, how much is it?" and I say $1, and then you come and say "hey I want to buy an entire truck full of cookies, will you sell them for $0.50 each?", am I discriminating anyhow against the first person if I sell the cookies for $0.50 to the second guy? It's the most insane assumption I've heard in a while.

It's not discrimination, it's price discrimination.

The range of coffee, and the range of prices, that Starbucks has is often used as an example of price discrimination. You take your basic product, add a cheap to provide option, and charge more. This allows rich people to give you more money.

Sorry, I didn't mean the word "discriminate" as a judgement against these companies. I edited the post to (hopefully) be clearer.

>If you've got no money, you end up having to buy eg single cans of drinks instead of large bottles...you'd end up paying a lot more for a similar amount of stuff than someone who happened to have the money for the bulk.

As an aside, this effect may be further pronounced if lower-income consumers don't have the storage space for bulk purchasing.

Even if the differences in price are within someone's budget, they may be forced to purchase smaller, more expensive per unit items because they don't have enough shelf/refrigerator/storage space. In San Francisco for example, I think many people who wouldn't necessarily be considered lower-income consumers are negatively effected by an inability to purchase in bulk.

Yes, these effects turn up in poorer people not having freezers (and so needing to shop more regularly and/or not take advantage of some better value foods); washing machines (using a laundrette is expensive in time and money).

This week I've had to repair my car, computer, television and today I need to fix the boiler ... maintaining a house is hard with low income as things tend to have to wait for funds, and those things have a knock on effect.

Example: our poor neighbour needs roof work, their roof is causing our property to be wet, we have mouldy walls, peeling wallpaper. They don't have funds to get a roofer, we don't have funds to do the work for them (which would be to our benefit) nor to sue them to force them to do the work. Results - health risks, much faster property deterioration including risks of rotting wood and need to redecorate.

Social circles make a big difference too - our kids feel unhappy sometimes because their friends all have more stuff than them (for better or worse that's how they feel); on the flipside we get lots of hand-me-downs meaning we can much more afford to clothe ourselves than we otherwise would.

True, although in the US, larger suburban spaces are often cheaper than in-town apartments or houses. Our last apartment in Atlanta was 30-40% larger than our current one and had far more walk-in closet and storage space than we needed, yet was $500/mo cheaper than our present apartment in Midtown.

But yes, point taken; I grant that all other things being equal, poorer people aren't going to have as much storage space as wealthier ones.

But poor people could organize via the internet and buy in bulk as a group.

Quoting from the article:

> Low smartphone penetration in turn makes life more expensive in other ways. The unconnected do not benefit from the cheap communication, education, and even transport the app economy provides. A quarter of poor households do not use the internet at all, which makes seeking out low prices harder.

There are businesses that sell single servings of eg shampoo to very poor people in developing worlds.

http://trendwatching.com/trends/SACHET_MARKETING.htm

In some African countries drinking water is more expensive than Coca Cola ...

(f.x. http://daniaspillett.theworldrace.org/?filename=where-coke-i...)

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