4 ms·

No, the aggregate isn't important: the thought experiment is the same as if everybody earned $251k and spend $1k on rent -- but the percentage of income spend o

No, the aggregate isn't important: the thought experiment is the same as if everybody earned $251k and spend $1k on rent -- but the percentage of income spend on rent would be radically different. But yes, if everybody suddenly had $250k disposable income, prices would be higher. I think the point GP is trying to make, is that it matters more if you can afford in absolute dollars to have a family on whatever is left when you're done paying rent, not what the percentage is.

kgwgk 8y ago
And my point is that an “everything else being equal” argument about the income and spending of an individual is not particularly useful when discussing demographic issues.
- sidrajaram 8y ago
  Yes, the cost of things is more expensive in dense cities, but by 2x-3x for some services and not at all for buying a pair of jeans from a retailer - those prices are pretty much uniform everywhere, modulo state/local taxes. I'll argue that one's quality of life is better in SV on $250k vs $70k in the rural midwest or $100k in a midwestern city - obviously this will depend on spending patterns, which depends on personal preferences. But for me, it's a conscious decision to make more and spend more on a west coast city.
Retric 8y ago
The problem is you need more space after having kids. If your already spending 75% of your income on rent adding another room is not feasible. Or more basically you need a significant surplus to be able to afford kids.
- nickrivadeneira 8y ago
  That entirely depends on the income level you're talking, which is the OP's point. If you're making $10 mil and spending $7.5 mil on housing, you probably already have enough rooms to have kids. And even if you didn't, you could surely find room in your remaining $2.5 mil to add a room onto your house or find a slightly bigger place. This obviously does not apply if you're making $50k... Hence why absolutes are relevant.
  - Retric 8y ago
    You are assuming that 7.5 million buys a multi room home. At the extreme it may only rent you a 350 square foot apartment. Some people might spend 75% of their income on massive dwellings, but most people downsize if possible before going past 55% of income. And as we are talking about things on the social not individual level those preferences matter.

kgwgk 8y ago

And my point is that an “everything else being equal” argument about the income and spending of an individual is not particularly useful when discussing demographic issues.

sidrajaram 8y ago
Yes, the cost of things is more expensive in dense cities, but by 2x-3x for some services and not at all for buying a pair of jeans from a retailer - those prices are pretty much uniform everywhere, modulo state/local taxes. I'll argue that one's quality of life is better in SV on $250k vs $70k in the rural midwest or $100k in a midwestern city - obviously this will depend on spending patterns, which depends on personal preferences. But for me, it's a conscious decision to make more and spend more on a west coast city.

Retric 8y ago

The problem is you need more space after having kids. If your already spending 75% of your income on rent adding another room is not feasible. Or more basically you need a significant surplus to be able to afford kids.

nickrivadeneira 8y ago
That entirely depends on the income level you're talking, which is the OP's point. If you're making $10 mil and spending $7.5 mil on housing, you probably already have enough rooms to have kids. And even if you didn't, you could surely find room in your remaining $2.5 mil to add a room onto your house or find a slightly bigger place. This obviously does not apply if you're making $50k... Hence why absolutes are relevant.
- Retric 8y ago
  You are assuming that 7.5 million buys a multi room home. At the extreme it may only rent you a 350 square foot apartment. Some people might spend 75% of their income on massive dwellings, but most people downsize if possible before going past 55% of income. And as we are talking about things on the social not individual level those preferences matter.