1. Fantastic and fantastically interesting new @nberpubs study by @rebeccardiamond and Enrico Moretti on cost of living differentials by class of workers across US cities:
nber.org/papers/w29533
nber.org/papers/w29533
2. The study documents HUGE differentials in living costs/quality of life across US metros ...
3. Expensive coastal metros are ... well ... really expensive.
4. They measure this using a unique data set on credit card transactions ...
5. They find "vast geographical differences in material standard of living for a given income level."
6. But the interesting thing is those differences are driven by and mainly impact lower income, lower educated workers.
7. High income, college graduates make enough in wages and salaries in expensive coastal metros to more than cover the differences in living costs.
8. As they put it: "We find that for college graduates, there is essentially no relationship between consumption and cost of living ... "
9. ... suggesting that college graduates living in cities with high costs of living—including the most expensive coastal cities—enjoy a standard of living on average similar to college graduates with the same observable characteristics living in cities w/ low cost of living ..."
10. The real burden or cost of expensive cities falls on the less skilled and less educated.
11. Consider this: " Low-income residents in the most affordable commuting zone enjoy a level of consumption that is 74% higher than that of low-income residents in the most expensive commuting zone."
12. This is in line with findings by @CharlottadcM & me, on more & less skilled occupational classes:bloomberg.com/news/articles/…
13. And here is another new study by @CharlottadcM with similar findings using detailed micro-data from Sweden: static.sys.kth.se/itm/wp/cesis/c…
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