Saturday, February 16, 2008

My Letter to the Freakonomics Guys

I just sent this email to Steven D. Levitt and Stephen J. Dubner, the authors of Freakonomics and the Freakonomics Blog on the New York Times website. I thought I'd share it if anyone else wants to weigh in.

Are New Yorkers Living In My Future?

...and am I living in their past?

Guys, first-time e-mailer and long-time reader. Big Fan.

I have an economics question that maybe you guys can help me with. Actually, it's a theory (and maybe even that's too generous. A notion?) that I would love your opinions on.

I live in a small town in rural Oregon. I'm also an admitted New York-ophile. I'd move there in a second if I had my way, but my wife is a small town girl. Her response regarding the idea of moving ourselves and our young son to NY: "We'd come visit you." So, no dice.

I admire (fetishize) New York's role as the cultural, economic, artistic, architectural, and political hub of the world. But my interest brought about another thought: Are New Yorkers living in a world that is, in a way, temporally displaced from my small town universe? I think an argument can be made, and it has a more indirect relationship than all the art, commerce, etc. I think it has to do with cost of living.

As a public high school teacher, I know my income would significantly increase if I taught in New York. However, the cost of living would increase so significantly that I'd be earning less, in relative terms. But do the costs of all goods rise equally in relation to geography? Clearly, in our modern, interconnected world, they don't. So, what's the practical consequence?

Assuming my discretionary income, relative to cost of living, remained constant, what would I buy in New York that I wouldn't buy here? And what would a New Yorker buy here that he or she might not back home?

Say I wanted clothing. The cost of clothing in New York would be much greater than in Independence, OR, but perhaps that would remain constant relative to cost of living. In contrast, high-end items I might buy online regardless of my address would not change their prices. Consequently, a person earning a rural Oregon income, when forced to choose between, say, a new pair of jeans and than new iPhone, would be more likely to choose the jeans, which might cost $25. But, just the other day, my wife was telling me about a segment on Good Morning America in which the reporters were interviewing fashionistas helping folks like us choose flattering, affordable jeans, and the prices started at $95. My wife was stunned. The idea that $95 jeans were affordable seemed ludicrous to us. If that price is truly considered affordable by New Yorkers, might someone living there make a reasonable decision to forgo four pairs of jeans and buy the iPhone online, while I wouldn't consider buying an iPhone in lieu of 20 pairs of jeans? Not that anyone needs 20 pairs of jeans, but you get my point.

Now, this calculation doesn't translate for all high-end items. The cost of a car might not be significantly higher in New York, but all the costs of owning one are so much higher (and the benefits diminished greatly due to the option of reliable public transportation) that someone living in the city would have less incentive to buy a car than some living here in Oregon. But when it comes to high tech gadgetry, those supplementary costs (with the exception of sales tax, which we don't have in Oregon) would be roughly the same. So, when faced with jeans vs. gadget decisions over the long term, wouldn't it seem likely that a New Yorker would be more likely to have newer, fancier technology than someone like me?

Furthermore, because New York is such a significant market, wouldn't people in the city be exposed to the newest technologies more commonly than someone like me? I'm considered a geek for carrying a Palm Pilot (not even a blackberry), something technophiles consider outmoded. Here, my Palm is a cool gadget. In New York, it might be laughable in some circles. Certainly all the same technology is available to me, via the net, but outmoded technology not only carries more social cache here, it's also more useful, as the people around me aren't upgrading at the rate I assume New Yorkers upgrade.

Now, admittedly, there are people in New York and in rural Oregon who also want to have the newest in designer jeans. They could get them sooner in New York, though they'd pay a lot more. But (and maybe this is just me), jeans retain their utility much longer than technology, so they're less of a measure of time. An unfashionable pair of jeans still "works" ten years later, and fifteen years later if holes-in-the-knees come back in style. That iPhone? In ten years, it's just something for kids to laugh at.

If this divide actually exists, on a macro level might it not mean that a New Yorker is wearing equally functional jeans, but using slightly more modern gizmos? And, if, like every B Sci-Fi movie suggests, time is measured in technology, doesn't that mean that someone in New York is living in my future, and I'm living in her past?

No comments: