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Sunday, April 30, 2006

Equality discounting money 

If income is defined in terms of the services that are yielded by the products (and services) that we buy, it is much more equal than if it is defined in money terms. The comment compares a Camry to a Lexus. The Lexus is a better car, but it costs three times as much and is it three times better? No. The 18-year-old Macallan (a single-malt Scotch) costs about twice as much as the 12-year-old, but the difference in taste is very slight. This seems a general characteristic of luxury goods. This is the sense in which people of widely different incomes can all consider themselves middle-class without being delusional.

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