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proof_required OP t1_j9jyoxc wrote

Reply to comment by hatsuseno in [OC] Median House Price to Income Ratio By Country by proof_required

You can check here but their median house price calculation is something like this

  public double calculateMedianHousePrice() {
    return (calculateMedianHousePriceCityCentre() + calculateMedianHousePriceOutsideOfCentre()) / 2;
  }

Also

> 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

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prylosec t1_j9l09l3 wrote

It's kinda weird that they're calculating the mean and calling it a median.

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titangord t1_j9llr9f wrote

They are doing the average of two medians.. one in the center and one not seems like

4

Chris-1235 t1_j9lnkmo wrote

Yeah, totally broken. You can't buy a house in NL with just over 3 years of "disposable income". I can't fathom where that would be possible in the US either. Sounds like the top salaries and the cheapest houses skew the distribytions enough, to result in a useless ratio.

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whooguyy t1_j9n4hqo wrote

You can’t average two medians. If there are 5 times more houses in the city center than there are out of it, this will completely skew it in favor of the out of city center median

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