It seems to assume everyone is married, for one. Can someone tell me why such a trivially-calculated and easily-cooked example is useful here? Is there a source for their numbers?
Also, why are they saying “disposable income” when what they mean is _all their income_?
From their info page:
“Note that there is no standard formula to calculate property price indices. Our formulas differs from Case-Shiller Index, UK Housing Price Index, etc.
Price to Income Ratio is the basic measure for apartment purchase affordability (lower is better). It is generally calculated as the ratio of median apartment prices to median familial disposable income, expressed as years of income (although variations are used also elsewhere). Our formula assumes and uses:
- net disposable family income, as defined as 1.5 * the average net salary (50% is assumed percentage of women in the workforce)
- median apartment size is 90 square meters
price per square meter (the formula uses) is the average price of square meter in the city center and outside of the city center
It seems to assume everyone is married, for one. Can someone tell me why such a trivially-calculated and easily-cooked example is useful here? Is there a source for their numbers?
Also, why are they saying “disposable income” when what they mean is _all their income_?
From their info page:
“Note that there is no standard formula to calculate property price indices. Our formulas differs from Case-Shiller Index, UK Housing Price Index, etc.
Price to Income Ratio is the basic measure for apartment purchase affordability (lower is better). It is generally calculated as the ratio of median apartment prices to median familial disposable income, expressed as years of income (although variations are used also elsewhere). Our formula assumes and uses:
- net disposable family income, as defined as 1.5 * the average net salary (50% is assumed percentage of women in the workforce) - median apartment size is 90 square meters price per square meter (the formula uses) is the average price of square meter in the city center and outside of the city center
...”