Last week, Elon Musk Promise to sell $6 billion Teslastock And donate the proceeds to the UN Food Agency, if it can prove money Will solve the world hunger.
Here, Ryan McNelley, managing director of Kroll’s portfolio valuation service line, discussed the actual situation of quantifying this value.
Q: Elon Musk said that if he wants to, he will donate US$6 billion. A sort of It can be proved that they will use it to cure world hunger, but how do you evaluate things like hunger?
If you want to give the number needed to solve world hunger a number, then the best way is to look at it from the perspective of “fair value,” which we define as someone willing to pay for the purchase of assets or to pay off liabilities.
However, this fee does not solve the full scope of the problem, which is particularly difficult to estimate, because no one can put a number on the pain and heartbreak that hunger causes to people all over the world every day.
Q: So, how will you gradually solve the initial cost of solving the hunger problem?
The first step is to define how to measure your pricing, in this case, it is the cost of solving the world’s hunger problem. This can be achieved by measuring the degree of malnutrition, the nutritional value of the food, and the medications needed to treat the symptoms of hunger. Then you need to expand these factors globally.
Once you define hunger, the process will be relatively simple. It’s a matter of looking at the cost of what you need and the price of getting it where you need to go.
Let’s take a look at Britain. It is said that 1 person 1 day’s nutritious food will cost at least 5 pounds. Multiply that by the 365 days of the year, assuming that the cost of food for a person in a year is £1,825.
In addition to the cost of food, you also need to consider storage-where do you store all your food? According to the management company Jones Lang LaSalle, the cost of cold storage is approximately £150-170 per square foot. Charity, Fare sharing, The number of people who make it unaffordable in the UK is 8.4 million, which is the population of London.
Assume that 1 square foot of refrigerated warehouse space can accommodate daily food for 50 people. 8.4 million divided by 50 is 168,000. This means that if you flip food every day, you will need approximately 168,000 square feet of space to hold all the food. Let’s put it at the low end of the price range, so £150. The annual rent will cost you £25.2 million (£25.2 million).
Then we went back to the cost of food for one of us for a year. Multiply that by 8.4 million hungry people, and the cost of food that year would be £15,330,000,000. That is 15.333 billion.
Adding the cost of food to the cost of storage, in the United Kingdom, it is estimated very quickly that it would cost £15,355,200,000 to buy and store only the food needed for a year for those in need. This is 2.5 times higher than Elon Musk’s pledge to eradicate hunger on a global scale. We have not even considered dry storage space, delivering food where it needs to go, paying for the energy costs of cooking, or paying the wages of the workers who deliver the food.
Q: That’s a lot of money. Do you think our economy can afford these costs?
A: Although I am not an economist, we can assume that if the crisis is resolved, individual countries and the world will feel huge economic benefits. In addition, due to reducing the number of hungry and malnourished people, the world will feel unlimited social benefits.
Solving hunger is an investment, not a cost. You need to decide whether you can link countries with lower levels of hunger and better economic growth in the form of GDP. There is research by American charities, concern, Regarding the cost of “stunting”, that is, the impact of impaired growth of children due to malnutrition on the African economy. They found that in Ethiopia, the percentage of GDP lost due to stunting was 16.5%. In Sudan, the same company discovered that child stunting is said to affect 7.9 million people and cost the economy US$2 billion.
This shows that if the hunger problem in these countries and the immeasurable social benefits are solved, GDP will also benefit. While paying the initial cost, it is reasonable to say that the country will obtain greater returns in terms of financial and social welfare.
Because when it comes to hunger, although there is a large upfront cost—maybe far more than US$6 billion—but it will also bring a lot of economic and social benefits to the country and the world. The funds paid today to solve world hunger may be obscured by future financial gains because it promotes a more prosperous economy and potential for future growth. Therefore, one can assume that the overall cost of eliminating world hunger for a country is actually zero.
