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The adjustment seems overly aggressive. Salary is proportional to 0.7 * Rent_Index + 0.3, where Rent_Index is normalized to be 1.0 for New York City - so basic
by madcaptenor 8y ago
The adjustment seems overly aggressive. Salary is proportional to 0.7 * Rent_Index + 0.3, where Rent_Index is normalized to be 1.0 for New York City - so basically they're adjusting salaries as if 70% of your spending goes to rent. They probably should use an index that's a bit less aggressively weighted towards housing costs.
- fyfy18 8y agoYeah, if you want to buy a new car or iPhone in Minsk, it's going to cost you the same as in SF (and maybe more).
- brittany6229 8y agoWe ran linear regressions to see which factor was more statistically relevant between Cost of Living, Cost of Living with Rent Index, and Rent Index. We chose rent index from Numbeo based on those evaluations, which expresses the ratio of cost of rent in many metro areas. Since we are using San Francisco salary benchmarks, we divide by 1.26 to normalize the rent index to San Francisco. We multiply the Rent Index by 0.7 and then add 0.3, so the sum would equal 1 (i.e. we pay San Francisco rates in San Francisco).
- madcaptenor 8y agoSo where does the 0.7 and 0.3 come from?