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Yeah it's insane these simply facts are completely devoid of any discussion. Inflation as we talk about it colloquially is supposed to measure price changes of

Yeah it's insane these simply facts are completely devoid of any discussion. Inflation as we talk about it colloquially is supposed to measure price changes of the same thing. Like an apple. What actually happens in most discussions is that we measure wildly different things and then say 'look, prices changed'. Not just have homes gotten bigger, the heating and cooling is better, they're safer, they're equipped with more amenities etc. My grandparents didn't have a shower, but went to the communal bathhouse once a week. My parents didn't have central heating in one of their homes. I see the same discussion in healthcare. Life expectancy in many western countries grew by 20-30 years since the second world war, which is a radically improved outcome which proxies health throughout life, yet we are shocked this outcome is much more expensive than before. College is trickier, there's tons of inflation there and you can wonder if education really improved. By some measures, it worsened, by some it's much better. What's clear however is that educational attainment has never been higher. That's not to say there's no inflation in any of these areas. But rather that it's much more nuanced if corrected for some values.

bradleyjg 7y ago
I see the same discussion in healthcare. Life expectancy in many western countries grew by 20-30 years since the second world war, which is a radically improved outcome which proxies health throughout life, yet we are shocked this outcome is much more expensive than before. There’s been more than 300% increase in the last thirty years. How much better off are we health wise than 1990? 1945, sure, but 1990?
- Gibbon1 7y ago
  What you are arguing against is a classic smoke and mirrors job where two unrelated things are linked together. If you look outside the US you see similar huge gains in life expectancy. Which are 95% due to basic public health measures. Seriously: Life expectancy Cuba: 79.18 years. Life expectancy US: 79.11
  - IkmoIkmo 7y ago
    I don't live in, or look at exclusively at the US. In western europe for example there've been massive increases in healthcare costs, too. These are socialised, citizens don't pay them through their insurance package, but they're paid by society (citizens) through taxes for sure. And these have created large gains. Cuba is a poor example because it prioritises health over everything else. That's not a value judgement, rather that it's just an outlier. If you mandate in a dictatorial government that people should be doctors and work for a humble salary, then of course you'll see good healthcare outcomes for little money.
    - vinay427 7y ago
      > These are socialised, citizens don't pay them through their insurance package, but they're paid by society (citizens) through taxes for sure. This isn't true for much of western Europe which doesn't have a single-payer model. Subsidies and regulations are more abundant than in the US, certainly, but for example everyone where I live in western Europe has to pay out of pocket for insurance premiums and deal with deductibles, etc.
  - yostrovs 7y ago
    Only those that never lived under communism would believe those numbers. Same as the information on the coronavirus from China. https://www.econlib.org/about-that-cuban-life-expectancy/ https://www.econlib.org/about-that-cuban-life-expectancy/
    - Gibbon1 7y ago
      You can make a similar argument that Cuba and China's literacy rate is very low because they're communists.
      - yostrovs 7y ago
        You can argue anything you want. I just don't believe the numbers reported. Not for healthcare in Cuba, not the virus in China. And literacy rates in communist countries were made high so kids will be indoctrinated into Lenin as quickly and thoroughly as possible. That's the only reason.
- IkmoIkmo 7y ago
  Agreed, the change is much less significant. Yet I was surprised that healthcare outcomes continued to improve during this time. Life expectancy has grown by almost 4 years since the 1990s, that's absolutely not insignificant. And there's good reason to believe that healthcare interventions have strongly improved, but that baseline health is much worse. Even stable healthcare outcomes would, if this is true, be evidence for interventions having improved. If you look at obesity levels for example (just google the charts), they're absolutely ridiculous and create a much larger burden (and cost) on healthcare interventions for the same outcome (e.g. life expectancy). The corollary is of course also true, which is that healthcare has improved due to many interventions not typically financed through healthcare costs / insurance. e.g. public health campaigns to stop smoking.
- deleted 7y ago
  [deleted]
pjc50 7y ago
By some measures housing is not as good: UK houses have shrunk from the days of the Parker-Morris standards.
tom_mellior 7y ago
>> The dot-com bubble only took 10% off the average house price in SF. The 2008 mortage crisis took 27% over the entire time period -- which was followed by an 88% increase. > My grandparents didn't have a shower, but went to the communal bathhouse once a week. My parents didn't have central heating in one of their homes. So what are you saying? In 2008 people started throwing out their showers, and a few years later they built in jacuzzis with disco lighting, and that explains these wild swings?
- IkmoIkmo 7y ago
  No? You're looking at an extremely local level at SF, which is obviously influenced by the tech industry which is hosting some of the world's largest companies like Apple, who's revenue tenfolded since 2007. If you look at median home sales prices in the US in general however, you get this picture (just compare the peak of 2007 till today): https://fred.stlouisfed.org/series/MSPUS?utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=categories https://fred.stlouisfed.org/series/MSPUS?utm_source=series_p... I'm not seeing an 88% increase. Now if you correct that picture for median household income in the US, for the same period: https://fred.stlouisfed.org/series/MEHOINUSA646N https://fred.stlouisfed.org/series/MEHOINUSA646N You'll see, income-adjusted home prices haven't shot up that much since the last peak. Then you have to contextualise further, and look at interest rates. After all, you're not buying homes in cash. For almost all of us, when we 'buy' a home, we're really just signing a rental contract for cash (a loan), and our housing costs consists of servicing this loan, the mortgage payments. The principal sum matters of course, which went up as prices grew, but so does the interest rate, which is at a historic low and responsible for the prices growing. You can't just ignore interest rates. So if you actually look at monthly payments, which is by definition corrected for interest rates, and correct that for income increases, really what we talk about when we say 'housing costs', really isn't anywhere near the record levels usually talked about in the media, discussion forums etc. And THEN you correct that for the larger homes etc. Now I tried to give a longer historical perspective of price increases for a few generations beyond mine, but if you want to nitpick that and make a joke about jacuzzis, fine by me. My point is that if we break down what a 'change in housing costs' really should mean, we typically want to talk about: income-adjusted, monthly (periodical) cost for a square foot. What we tend to do is: ignore the fact our incomes rose greatly in nominal terms, yet express increases housing in nominal terms, ignore interest payments dropping for decades reducing the costs to finance these homes, and then ignore the fact these homes have doubled in size in the post-war era and typically have much better amenities. And that's not a fair representation, I think.

bradleyjg 7y ago

I see the same discussion in healthcare. Life expectancy in many western countries grew by 20-30 years since the second world war, which is a radically improved outcome which proxies health throughout life, yet we are shocked this outcome is much more expensive than before. There’s been more than 300% increase in the last thirty years. How much better off are we health wise than 1990? 1945, sure, but 1990?

Gibbon1 7y ago
What you are arguing against is a classic smoke and mirrors job where two unrelated things are linked together. If you look outside the US you see similar huge gains in life expectancy. Which are 95% due to basic public health measures. Seriously: Life expectancy Cuba: 79.18 years. Life expectancy US: 79.11
- IkmoIkmo 7y ago
  I don't live in, or look at exclusively at the US. In western europe for example there've been massive increases in healthcare costs, too. These are socialised, citizens don't pay them through their insurance package, but they're paid by society (citizens) through taxes for sure. And these have created large gains. Cuba is a poor example because it prioritises health over everything else. That's not a value judgement, rather that it's just an outlier. If you mandate in a dictatorial government that people should be doctors and work for a humble salary, then of course you'll see good healthcare outcomes for little money.
  - vinay427 7y ago
    > These are socialised, citizens don't pay them through their insurance package, but they're paid by society (citizens) through taxes for sure. This isn't true for much of western Europe which doesn't have a single-payer model. Subsidies and regulations are more abundant than in the US, certainly, but for example everyone where I live in western Europe has to pay out of pocket for insurance premiums and deal with deductibles, etc.
- yostrovs 7y ago
  Only those that never lived under communism would believe those numbers. Same as the information on the coronavirus from China. https://www.econlib.org/about-that-cuban-life-expectancy/ https://www.econlib.org/about-that-cuban-life-expectancy/
  - Gibbon1 7y ago
    You can make a similar argument that Cuba and China's literacy rate is very low because they're communists.
    - yostrovs 7y ago
      You can argue anything you want. I just don't believe the numbers reported. Not for healthcare in Cuba, not the virus in China. And literacy rates in communist countries were made high so kids will be indoctrinated into Lenin as quickly and thoroughly as possible. That's the only reason.
IkmoIkmo 7y ago
Agreed, the change is much less significant. Yet I was surprised that healthcare outcomes continued to improve during this time. Life expectancy has grown by almost 4 years since the 1990s, that's absolutely not insignificant. And there's good reason to believe that healthcare interventions have strongly improved, but that baseline health is much worse. Even stable healthcare outcomes would, if this is true, be evidence for interventions having improved. If you look at obesity levels for example (just google the charts), they're absolutely ridiculous and create a much larger burden (and cost) on healthcare interventions for the same outcome (e.g. life expectancy). The corollary is of course also true, which is that healthcare has improved due to many interventions not typically financed through healthcare costs / insurance. e.g. public health campaigns to stop smoking.
deleted 7y ago
[deleted]

pjc50 7y ago

By some measures housing is not as good: UK houses have shrunk from the days of the Parker-Morris standards.

tom_mellior 7y ago

>> The dot-com bubble only took 10% off the average house price in SF. The 2008 mortage crisis took 27% over the entire time period -- which was followed by an 88% increase. > My grandparents didn't have a shower, but went to the communal bathhouse once a week. My parents didn't have central heating in one of their homes. So what are you saying? In 2008 people started throwing out their showers, and a few years later they built in jacuzzis with disco lighting, and that explains these wild swings?

IkmoIkmo 7y ago
No? You're looking at an extremely local level at SF, which is obviously influenced by the tech industry which is hosting some of the world's largest companies like Apple, who's revenue tenfolded since 2007. If you look at median home sales prices in the US in general however, you get this picture (just compare the peak of 2007 till today): https://fred.stlouisfed.org/series/MSPUS?utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=categories https://fred.stlouisfed.org/series/MSPUS?utm_source=series_p... I'm not seeing an 88% increase. Now if you correct that picture for median household income in the US, for the same period: https://fred.stlouisfed.org/series/MEHOINUSA646N https://fred.stlouisfed.org/series/MEHOINUSA646N You'll see, income-adjusted home prices haven't shot up that much since the last peak. Then you have to contextualise further, and look at interest rates. After all, you're not buying homes in cash. For almost all of us, when we 'buy' a home, we're really just signing a rental contract for cash (a loan), and our housing costs consists of servicing this loan, the mortgage payments. The principal sum matters of course, which went up as prices grew, but so does the interest rate, which is at a historic low and responsible for the prices growing. You can't just ignore interest rates. So if you actually look at monthly payments, which is by definition corrected for interest rates, and correct that for income increases, really what we talk about when we say 'housing costs', really isn't anywhere near the record levels usually talked about in the media, discussion forums etc. And THEN you correct that for the larger homes etc. Now I tried to give a longer historical perspective of price increases for a few generations beyond mine, but if you want to nitpick that and make a joke about jacuzzis, fine by me. My point is that if we break down what a 'change in housing costs' really should mean, we typically want to talk about: income-adjusted, monthly (periodical) cost for a square foot. What we tend to do is: ignore the fact our incomes rose greatly in nominal terms, yet express increases housing in nominal terms, ignore interest payments dropping for decades reducing the costs to finance these homes, and then ignore the fact these homes have doubled in size in the post-war era and typically have much better amenities. And that's not a fair representation, I think.