Re:Request For Research: Basic Income
by derefr on Wednesday January 27, 2016 @10:41PM
(#10986052)
See my sibling comment: figure out how much inelastic demand there is for a good-category, rebate that amount off of all prices using necessity-dollar allocation, and then whatever's left over is the true nicety-dollar (i.e. elastic demand) cost.
One interesting effect of this is that if you calculated it per-market, then different goods would have different inelastic-demand floors in different markets. In e.g. Vancouver, where tiny one-bedroom detached homes can cost >$1mm, there'd be a pretty large necessity-dollar allocation for rent/mortgage. In Cleveland, where houses go for $65k, it'd be much lower.
You might not want this effect—you might want to incentivize people to move to cheaper markets instead. But the network-effect of cities is another of those things economic incentives just don't seem to work very well to treat.
One interesting effect of this is that if you calculated it per-market, then different goods would have different inelastic-demand floors in different markets. In e.g. Vancouver, where tiny one-bedroom detached homes can cost >$1mm, there'd be a pretty large necessity-dollar allocation for rent/mortgage. In Cleveland, where houses go for $65k, it'd be much lower.
You might not want this effect—you might want to incentivize people to move to cheaper markets instead. But the network-effect of cities is another of those things economic incentives just don't seem to work very well to treat.