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Why is it irrelevant?
by Colman (colman at eurotrib.com) on Tue Dec 4th, 2007 at 11:47:10 AM EST
[ Parent ]
Take the house example. The wealth represented by the house has an effect on consumption and well-being insofar as it saves you the cost of renting an equivalent property. So the amount of wealth (market value of assets?) is not so important as the income or savings from opportunity costs that can be made from it.

IANAE, and all that.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Tue Dec 4th, 2007 at 11:51:46 AM EST
[ Parent ]
Well, a decent level of living requires suitable shelter? Then the house contributes directly to that, as do its contents. If you have sufficient wealth you can have a decent standard of living without all that much consumption.
by Colman (colman at eurotrib.com) on Tue Dec 4th, 2007 at 11:56:42 AM EST
[ Parent ]
But if your wealth consists of a big fat piece of jewellery, it doesn't have the same rent-equivalent value to you.

So, yes, I understand your argument about infrastructure. But take the UK, where the infrastructure hasn't been kept up to the point where, even if it's still a "wealthier" country than Ireland, it costs a lot of money just to move around and this is reflected in the GDP (PPP) albeit in a different way from how lack of infrastructure affects Ireland.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Tue Dec 4th, 2007 at 12:04:13 PM EST
[ Parent ]

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