4 ms·

You might be missing the original point, which highlights that not everyone might want to buy "a house" in the first place.

banku_brougham 9y ago
Yes I think i understand now. But doesnt this line of reasoning lead to an absurdity? As in “this article is poor because if neglects the edge case if someone living in his van and saving 80% of his NYC salary.”
- TheCoelacanth 9y ago
  Someone living in a studio apartment or a one bedroom apartment is not a edge case; it is a very common lifestyle choice.
  - closeparen 9y ago
    The price of a small apartment in an expensive city is still high enough to create a massive chasm: in a cheap city, you could easily pay less than $1k/mo for one, or live with roommates and a log commute for closer to $500. Not to mention that the rent in expensive cities only rises. It’s even more important to become an owner if you want to stay more than a little while.
    - TheCoelacanth 9y ago
      > in a cheap city, you could easily pay less than $1k/mo for one, or live with roommates and a log commute for closer to $500. Yes, but you aren't spending your entire income on housing. What type of housing you choose has a huge effect on the relative cost-of-living between two locations. Let's take two hypothetical locations, L1 and L2. In L2, housing is three times as expensive, goods in the category G1 are 50% more expensive because you have to buy them locally and retailers have higher expenses and goods in the category G2 are the same price because you order them from Amazon. You make $100k in L1, how much do you need to make to have the same lifestyle in L2? Scenario 1: In L1, you spend $20k on housing, $20k on G1 and $60k on G2. To have the same lifestyle in L2, you need to spend $60k on housing, $30k on G1 and $60k on G2 for a total of $150k. So for you, L2 has a COL of 150% of L1. Scenario 2: In L1, you spend $60k on housing, $30k on G1 and $10k on G2. To have the same lifestyle in L2, you need to spend $180k on housing, $45k on G1 and $10k on G2 for a total of $235k. So for you, L2 has a COL of 235% of L1. So, which one is the real COL? They are both are equally valid. COL only makes sense in the context of a specific lifestyle. The best these single number answers can do is to guess what the average person's spending patterns will be, but people naturally self-select towards areas that are more favorable to their preferred lifestyle which means that the average spending patterns are often not an accurate reflection of the preferences of people who have chosen to live in that area.

banku_brougham 9y ago

Yes I think i understand now. But doesnt this line of reasoning lead to an absurdity? As in “this article is poor because if neglects the edge case if someone living in his van and saving 80% of his NYC salary.”

TheCoelacanth 9y ago
Someone living in a studio apartment or a one bedroom apartment is not a edge case; it is a very common lifestyle choice.
- closeparen 9y ago
  The price of a small apartment in an expensive city is still high enough to create a massive chasm: in a cheap city, you could easily pay less than $1k/mo for one, or live with roommates and a log commute for closer to $500. Not to mention that the rent in expensive cities only rises. It’s even more important to become an owner if you want to stay more than a little while.
  - TheCoelacanth 9y ago
    > in a cheap city, you could easily pay less than $1k/mo for one, or live with roommates and a log commute for closer to $500. Yes, but you aren't spending your entire income on housing. What type of housing you choose has a huge effect on the relative cost-of-living between two locations. Let's take two hypothetical locations, L1 and L2. In L2, housing is three times as expensive, goods in the category G1 are 50% more expensive because you have to buy them locally and retailers have higher expenses and goods in the category G2 are the same price because you order them from Amazon. You make $100k in L1, how much do you need to make to have the same lifestyle in L2? Scenario 1: In L1, you spend $20k on housing, $20k on G1 and $60k on G2. To have the same lifestyle in L2, you need to spend $60k on housing, $30k on G1 and $60k on G2 for a total of $150k. So for you, L2 has a COL of 150% of L1. Scenario 2: In L1, you spend $60k on housing, $30k on G1 and $10k on G2. To have the same lifestyle in L2, you need to spend $180k on housing, $45k on G1 and $10k on G2 for a total of $235k. So for you, L2 has a COL of 235% of L1. So, which one is the real COL? They are both are equally valid. COL only makes sense in the context of a specific lifestyle. The best these single number answers can do is to guess what the average person's spending patterns will be, but people naturally self-select towards areas that are more favorable to their preferred lifestyle which means that the average spending patterns are often not an accurate reflection of the preferences of people who have chosen to live in that area.