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I'm interested to know how one could arrive at a more reasonable number for a 2br apartment. Obviously, what you say is true: a luxury 2 BR with a doorman, gym
by pmiller2 8y ago
I'm interested to know how one could arrive at a more reasonable number for a 2br apartment. Obviously, what you say is true: a luxury 2 BR with a doorman, gym, pool, onsite parking, and pets allowed is going to be vastly more expensive than your basic 2BR with none of that included. How do you tease them apart?
- occamrazor 8y agoThe easiest way is taking the median instead of the mean. For more info and other methods, search for “robust estimators”.
- pmiller2 8y agoI guess I wasn't clear enough. Using the median certainly works better if you're looking at the population of "all 2BR apartments." But, I would contend that's a mistake, as luxury apartments are really fundamentally different from non-luxury apartments. And, among luxury apartments, individual amenities matter. A pool is likely to be less relevant than a doorman, for instance. Statistically, I don't see any good way around this other than doing a really gnarly ANOVA to tease out the prices of individual amenities.
- loeg 8y ago2BR just happens to be the category the article chose. It's a reasonable assumption that e.g. families with a kid are going to rent at least a 2BR — of any age and luxury — if they can afford to.
- cimmanom 8y agoMedian instead of mean? Though it's not clear here which they used for the calculations.
- loeg 8y agoMedian is a good place to start. You might also try to factor in how relative income affects relative rental spend choices. I.e., (on average) someone making $50k and someone making $100k in the same town are looking at different parts of the rental market. If there's a rental market floor at $2800/mo, that's extremely relevant but the average rental price definitely doesn't capture that.