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The alternate income measures include net return on housing equity, not the consumption measure. Net return on housing equity is income that you can use to buy

The alternate income measures include net return on housing equity, not the consumption measure. Net return on housing equity is income that you can use to buy stuff with - for example, housing in a cheaper location + other stuff. Living in an expensive locale is a consumption choice.

makomk 11y ago
The expensive areas are expensive because that's where all the jobs, services, good schools etc are. Counting an increase in the cost of those areas as a reduction in poverty is bizarre and perverse - it means that you're counting people as better off because it costs more to access jobs and education.
- yummyfajitas 11y ago
  Suppose the good jobs and services left while the schools went to crap (aka Detroit). Wouldn't people be worse off? Would this be a reduction in poverty? When someone's home equity has appreciated, they are now living in a more valuable place than they were to start, but they don't have to pay for this. That's income.
  - makomk 11y ago
    Yes, they would be worse off. Now suppose the good jobs and services left from a huge swathe of the country and continued to do so, forcing people to move to a smaller number of more expensive urban areas if they wanted work. Since there's only a limited amount of land area, this would force up prices in those urban areas, making people worse off in real terms as they were forced to pour more of their income into a smaller house and had less to spend on everything else, but would show up as a decrease in poverty as their expensive house got more expensive. (And of course schools and services will cost more to run.) This is pretty much what's been happening worldwide, from what I've seen. The idea of treating appreciation in home equity as income is broken, because it means that this kind of mass urbanization and consolidation appears to be an increase in income when in fact it causes a reduction in real income.

makomk 11y ago

The expensive areas are expensive because that's where all the jobs, services, good schools etc are. Counting an increase in the cost of those areas as a reduction in poverty is bizarre and perverse - it means that you're counting people as better off because it costs more to access jobs and education.

yummyfajitas 11y ago
Suppose the good jobs and services left while the schools went to crap (aka Detroit). Wouldn't people be worse off? Would this be a reduction in poverty? When someone's home equity has appreciated, they are now living in a more valuable place than they were to start, but they don't have to pay for this. That's income.
- makomk 11y ago
  Yes, they would be worse off. Now suppose the good jobs and services left from a huge swathe of the country and continued to do so, forcing people to move to a smaller number of more expensive urban areas if they wanted work. Since there's only a limited amount of land area, this would force up prices in those urban areas, making people worse off in real terms as they were forced to pour more of their income into a smaller house and had less to spend on everything else, but would show up as a decrease in poverty as their expensive house got more expensive. (And of course schools and services will cost more to run.) This is pretty much what's been happening worldwide, from what I've seen. The idea of treating appreciation in home equity as income is broken, because it means that this kind of mass urbanization and consolidation appears to be an increase in income when in fact it causes a reduction in real income.