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Not a big fan of PPP adjusted income because it’s such a hard thing to accurately measure a “equivalent basket of goods”. It’s like the online “cost of living”
by refurb 4y ago
Not a big fan of PPP adjusted income because it’s such a hard thing to accurately measure a “equivalent basket of goods”.
It’s like the online “cost of living” calculators. I’ve found them hilariously off usually because the data isn’t great.
People saying living in the Bay Area is way more expensive. But having lived in a few US cities, it’s pretty much housing that is more and if you live like the locals (smaller homes) the cost difference is much less than you’d think.
Saying “SF has 500% higher housing costs” is silly if you’re comparing a $300,000, 2,000 sq ft single family home in the mid-west to the same single family home in SF where the homes are much smaller and much rarer.
Same with other countries - how do you compare food costs in SE Asia where buying at a local food stand is common, to the US where buying and preparing your own food at home is common?
- anon291 4y agoI mean a good metric would be yearly expenditure over yearly earning maybe?
- refurb 4y agoIt's a very similar problem as measuring inflation with a basket of goods. A "basket" doesn't stay the same. Is a new iPhone 7 in 2016 equal to a iPhone 14 in 2022? And things you'd expect to be easy to measure like food, aren't, because can you compare ground beef in 2000 with organic ground beef in 2020? Are they the same? Probably the easiest way is to measure some "average" expenditure on say housing and although it buys "less", call them equivalent. So a large 3-bedroom condo in San Francisco might be equivalent to say a single family home in Chicago.
- dmz73 4y agoI think that if you have to ask questions like the iPhone equivalence then 1) you have inflation that is higher than officially reported and 2) inflation is not a problem for you or most of the people in your country.
- refurb 4y agoI don't follow that in the least. These are important questions that economists try and answer through a careful study and discussion. What you're saying is: a) their method skews inflations numbers and b) inflation is not a problem because they measure it? I'm just confused.
- programmer_dude 4y agoIMO numbeo.com has pretty accurate stats for Indian cities. Is this not true of their info on the US?
- refurb 4y agoIt works ok for comparable cities, but I think it loses a lot of nuance. Like my example of housing costs. It will say "you need $50,000 more to live in San Francisco". But that's assuming you get comparable housing, which nobody actually does. If you go from typical "middle class" housing in say St. Louis, to San Francisco, then the COL difference isn't as steep.
- imtringued 4y agoIt's been years and my city is still 30% better than every city I've checked yet it's on none of their lists, probably because of not enough data.