From today’s Economic Times

Interesting article titled “Which is America’s Best Affordable Suburb?” by Venessa Wong (Bloomberg BusinessWeek).

The question of the “standard of living” is answered glibly by most unthinking people by reference to such schema as the first world, second world and third world.  It is assumed as obvious that the “standard of living” can be generally said to be better in the first world, followed by the second world with the third world having the lowest standard of living.  At the risk of labouring the obvious I wish to point out some deficiencies in this world view.

First some facts. Fishers, Indianapolis emerged as America’s best affordable suburb in Bloomberg BusinessWeek’s 2010 report.  The average family income in Fishers is $108,086 (at todays exchange rate from Oanda Rs 45.5080 per USD) INR 49,18,777.688 rounded off for convenience to INR 50 lakhs per annum.  The average home value is $174,438 (=INR 79,38,324.504 roughly INR 80 lakhs).  The 2008 Census pegged the average US family income at $50,303 (=INR 22,89,188.924 roughly INR 23 lakhs), and the average home value was $173,200 (=INR 78,81,985.6) in february 2010 (NAR). These numbers are taken from the article, I cannot vouch for their accuracy but they should work for a ball park estimate.  The couple from Sri Lanka showcased in the article bought a 3,100 sq ft house (built up? carpet area? what does 3,100 sq ft include?  Did they buy the rights to the land the house was built upon?  How much was the land component of the price and how much for the structure itself?) with 3 bedrooms and 2.5 baths which is now valued at $162,000 (=INR 73,72,296).

What I wanted to point out was that the “standard of living” depends on the each individuals idiosyncratic “preference function”.  I don’t drive.  There was no mention in the above article about a public transport system in this town.  It did say you could drive from one end of the town to the other in 15 minutes.  This affordable suburb would be highly inconvenient for me.  If I lived there, my standard of living would plummet.  Throw in the fact that this is a country where the colour bar was in operation as late as the nineteen sixties, and assorted other unmentionable facts, and you can quite well imagine what my standard of living would be out there.

Thus to reiterate: the standard of living depends on whose standard of living you are talking about.  It also depends on the cost of living of said individual.  No facile generalizations are possible.

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