3 ms·

this might seem obvious, but it doesn't really describe the situation well. things are expensive in manhattan because it is expensive to live in/around manhatta

this might seem obvious, but it doesn't really describe the situation well. things are expensive in manhattan because it is expensive to live in/around manhattan. even the lowly mcdonalds employee gets paid about twice as much to work in manhattan as in peoria. if you buy something that doesn't require local storage/labor, it will cost the same as it does in the rest of the country.

thaumasiotes 6y ago
> things are expensive in manhattan because it is expensive to live in/around manhattan. even the lowly mcdonalds employee gets paid about twice as much to work in manhattan as in peoria. All of this supports the idea that the value of a dollar is lower in Manhattan than elsewhere. Indeed, it doesn't just support the idea; it is a restatement of it.
- leetcrew 6y ago
  only if you ignore why it's more expensive to live in NYC. it's more expensive because it's more desirable to live in NYC than Peoria. waterfront property is also more expensive than similar inland properties. the water doesn't locally inflate the dollar; it's a feature that people pay extra for. if you accept that the real value of a dollar is less in NYC, you also have to accept weird consequences like a CPU from amazon is worth less there as well.
  - deleted 6y ago
    [deleted]
  - ebg13 6y ago
    > waterfront property is also more expensive than similar inland properties. That explains _property_, not McDonalds Quarter Pounders which are exactly the same everywhere.
    - leetcrew 6y ago
      it's another example of the same phenomenon. a mcdonald's quarter pounder is not the same everywhere. the sandwich itself is the same, but the location is an important (and sometimes expensive) part of the whole package. how much would you pay for a big mac that happens to be located a hundred miles away from you?
      - ebg13 6y ago
        > how much would you pay for a big mac that happens to be located a hundred miles away from you? You just showed that proximity to the buyer matters, not location, because _delivery_ is an additional cost in both money and time. If you want an apt comparison, you need to not bundle unrelated expenses. Whichever McDonalds I'm at, proximity to me is the same at time of purchasing identical Quarter Pounders, and the price is not.
        leetcrew 6y ago
        we seem to be talking past each other, but I'm curious to see exactly where our positions diverge. I think you already agreed that waterfront property is more valuable in real terms than a similar inland property because being close to the water is a desirable feature to some people. do you also agree that a retail space in NYC is more valuable than a similar space in peoria, in the same real sense, with the vast social and business network of NYC being the value add? if you agree that the real value of property in NYC is higher (due to proximity to lots of other desirable stuff), then you should agree that it makes sense that property commands a higher rent here. because the rent is higher, so too is the cost of labor and storage. if you follow the chain of reasoning thus far, you should agree that the real value of a quarter pounder in NYC is simply higher due to the higher input costs. I don't think there is an absolute "correct" answer here. we are arguing for competing models, and a model is only good insofar as it explains/predicts reality. if I squint hard enough, I can see why yours might make sense. but it seems to raise a lot more questions than answers. if a dollar in NYC is truly worth less than a dollar in peoria, why is this only reflected in the price of local goods and services (ie, stuff where local rent is a major input)? why does stuff from amazon have the same nominal cost everywhere in the US? it seems much simpler to just accept that NYC property has a higher real value and let everything else follow from that.

thaumasiotes 6y ago

> things are expensive in manhattan because it is expensive to live in/around manhattan. even the lowly mcdonalds employee gets paid about twice as much to work in manhattan as in peoria. All of this supports the idea that the value of a dollar is lower in Manhattan than elsewhere. Indeed, it doesn't just support the idea; it is a restatement of it.

leetcrew 6y ago
only if you ignore why it's more expensive to live in NYC. it's more expensive because it's more desirable to live in NYC than Peoria. waterfront property is also more expensive than similar inland properties. the water doesn't locally inflate the dollar; it's a feature that people pay extra for. if you accept that the real value of a dollar is less in NYC, you also have to accept weird consequences like a CPU from amazon is worth less there as well.
- deleted 6y ago
  [deleted]
- ebg13 6y ago
  > waterfront property is also more expensive than similar inland properties. That explains _property_, not McDonalds Quarter Pounders which are exactly the same everywhere.
  - leetcrew 6y ago
    it's another example of the same phenomenon. a mcdonald's quarter pounder is not the same everywhere. the sandwich itself is the same, but the location is an important (and sometimes expensive) part of the whole package. how much would you pay for a big mac that happens to be located a hundred miles away from you?
    - ebg13 6y ago
      > how much would you pay for a big mac that happens to be located a hundred miles away from you? You just showed that proximity to the buyer matters, not location, because _delivery_ is an additional cost in both money and time. If you want an apt comparison, you need to not bundle unrelated expenses. Whichever McDonalds I'm at, proximity to me is the same at time of purchasing identical Quarter Pounders, and the price is not.
      - leetcrew 6y ago
        we seem to be talking past each other, but I'm curious to see exactly where our positions diverge. I think you already agreed that waterfront property is more valuable in real terms than a similar inland property because being close to the water is a desirable feature to some people. do you also agree that a retail space in NYC is more valuable than a similar space in peoria, in the same real sense, with the vast social and business network of NYC being the value add? if you agree that the real value of property in NYC is higher (due to proximity to lots of other desirable stuff), then you should agree that it makes sense that property commands a higher rent here. because the rent is higher, so too is the cost of labor and storage. if you follow the chain of reasoning thus far, you should agree that the real value of a quarter pounder in NYC is simply higher due to the higher input costs. I don't think there is an absolute "correct" answer here. we are arguing for competing models, and a model is only good insofar as it explains/predicts reality. if I squint hard enough, I can see why yours might make sense. but it seems to raise a lot more questions than answers. if a dollar in NYC is truly worth less than a dollar in peoria, why is this only reflected in the price of local goods and services (ie, stuff where local rent is a major input)? why does stuff from amazon have the same nominal cost everywhere in the US? it seems much simpler to just accept that NYC property has a higher real value and let everything else follow from that.