Reduction of the Cost of Physical Living.

Good morning everyone.

Every once in a while we all get these weird ideas, thoughts and concepts that tend to appear in our heads randomly, this morning it was while I was in the bathroom.

So for once I thought I might put these thoughts down.

I’m pretty sure some sort of research has been done (or at least will be done) on this area.. but I’d like to share my thoughts without much research (because I’m too lazy to research + I suck at it).

So here’s what I was thinking – given how technology is advancing in this day and age.. eventually in the future the cost of physical living will keep dropping (more so developed countries*).

*will note this later

First, let’s have a quick look at the Top 50 cities with the highest Cost of Living (using Mercer’s ranking):

source: Global/Worldwide Cost of Living Survey Rankings 2010/2011
Rank 2010 City Country
1 LUANDA ANGOLA
2 TOKYO JAPAN
3 NDJAMENA CHAD
4 MOSCOW RUSSIA
5 GENEVA SWITZERLAND
6 OSAKA JAPAN
7 LIBREVILLE GABON
8 ZURICH SWITZERLAND
8 HONG KONG HONG KONG
10 COPENHAGEN DENMARK
11 SINGAPORE SINGAPORE
11 OSLO NORWAY
13 VICTORIA SEYCHELLES
14 SEOUL SOUTH KOREA
15 MILAN ITALY
16 BEIJING CHINA
17 LONDON UNITED KINGDOM
17 PARIS FRANCE
19 TEL AVIV ISRAEL
19 NAGOYA JAPAN
21 SAO PAULO BRAZIL
22 BERN SWITZERLAND
23 NIAMEY NIGER
24 SYDNEY AUSTRALIA
25 SHANGHAI CHINA
26 ROME ITALY
27 NEW YORK UNITED STATES
28 VIENNA AUSTRIA
29 RIO DE JANEIRO BRAZIL
30 ST. PETERSBURG RUSSIA
31 HELSINKI FINLAND
32 DAKAR SENEGAL
33 BANGUI CENTRAL AFRICAN REPUBLIC
33 MELBOURNE AUSTRALIA
35 AMSTERDAM NETHERLANDS
36 BAKU AZERBAIJAN
37 BRATISLAVA SLOVAKIA
38 GUANGZHOU CHINA
38 NOUMEA NEW CALEDONIA
40 ATHENS GREECE
40 DOUALA CAMEROON
42 SHENZHEN CHINA
42 DUBLIN IRELAND
44 ISTANBUL TURKEY
45 ABIDJAN IVORY COAST
45 HAVANA CUBA
47 PRAGUE CZECH REPUBLIC
48 BRAZZAVILLE CONGO
49 BARCELONA SPAIN
50 FRANKFURT GERMANY
50 ABU DHABI UNITED ARAB EMIRATES

Firstly, I was quite surprised that Luanda, Angola was the highest, and Chad, Ndjamena was listed as 3rd – both in the Africa continent.

This was only my own ignorance, but I noticed the common trait shared between these cities and other cities in the same continent is that the reason their Cost of Living is so high is usually due to the fact they have been pegged in the past by wars or politics (e.g. government oppression). I suppose this may apply for Moscow, Russia too[1][2].

Thus, for the sake of this post, I’ll keep it relevant to Developed Countries (listed here) only.

Factors to Consider:

Well from my understanding, Cost of Living seems to take into account Housing, Transportation, Goods and Services, and other general consumer needs[3]. With that in mind, the focus of my thoughts would be around these factors.

The Drop:

OK, so I mentioned technological developments, but why? My initial thoughts were that since so many things in our everyday lives are being digitalised/virtualised that the eventual need for their physical predecessors would no longer be required/made redundant in the future.

For example, see if you can picture this in maybe 50+ years – houses will be smaller, maybe a single/double bedroom with everything in it, yet most of a person’s day is spent in that one room.

Why? Because everything he/she needs could be carried out in a virtual space with the exclusion of primal necessities such as food, shelter, and (maybe) hygiene.

Even then, why would there be a need to go outside if things could be delivered to you? Having said that, why would the general population need transportation?

I bet one of your thoughts/arguments currently are that the physical interaction and socialisation between friends/family will be lost. True, but let me throw you a curve ball.

If the future generations to come do not even know what it was like to have physical interaction/socialisation, why would they miss it?

Similar to how we (or me) Generation Y’s tend to fail to understand our parent’s intentions or their childhood (e.g. a poor childhood riddled with harsh living conditions). How would we know? Even if families try to pass down these experiences they can never manifest into real enough experiences for the children of the future to understand.

So if you throw the physical interaction/socialisation out the window would people still crave for it? Perhaps it never existed.

So the removal/dramatic reduction of transportation would greatly decrease the cost of physical living in any developed country I reckon.

Housing is something I would not be too sure about, but if the size of housing is reduced, at least more houses (housing spaces) will be available – cost may not change (or rather, increase).

But consider this for a second – think about all the items you own, got it? Now.. think about how many of those are physical and how many of those you have to do something physical. Now, think about how many items you own virtually.

If the world shifts towards a virtually charged world, would you still need those physical items (other than to connect yourself to the virtual space)?

Physical, not Virtual

Notice how I kept mentioning physical in the Cost of Physical Living? The reason I put this in was because, although I believe the cost of our current lifestyles (generally only takes into account physical factors) will decrease, I do not believe virtual living would decrease.

Rather, it will start to be factored into the overall Cost of Living and increase. Since virtual environments are still somewhat emerging (subjective to where you live I suppose), they may not be considered into personal net worth/lifestyles/costs, e.g. all the virtual assets one may own in SecondLife. It is also probably due to this that people could evade physical tax with virtual currency4].

Something to keep in mind I suppose.

The [R]evolution

My personal thought is that a movement from the physical world to the virtual world would be inevitable, and it may be sad/scary to see – but like I said, who would know? Maybe some of us in 50+ years may still feel nostalgic about it. But it is quite scary sometimes to see how fast technology is advancing.

I guess it’s sometimes interesting to sit back and realise how much of the everyday tasks/activities we carry out can be accomplished virtually now.

Take into account how virtually connected everyone is to the world, apply a few theories like the “Six degrees of separation” into the mix and perhaps the picture may become clearer.

The infrastructure will be there for sure, the capabilities will be there too – will the human mind/heart be there?

Charles Darwin’s theory will be put into test again, will humans adapt to it? I don’t know about you, but I’m quite curious to find out! (Given we survive 2012, lolololol).

Kind of reminds me of Jeremy’s future outlook – everyone will be in these tubes with wires connected to their brains, playing multiple games at once in their head – haha.

Thoughts anyone? 🙂

References:

  1. “Angola, The high cost of living in Luanda”: http://globalvoicesonline.org/2009/11/09/angola-the-high-cost-of-living-in-luanda/
  2. “Chad: Everyday Life in N’Djamena – An Eye-Witness Account by Nakar Djindil”: http://allafrica.com/stories/200903270163.html
  3. “How is the cost-of-living index calculated?”: http://eiu.enumerate.com/asp/wcol_HelpIndexCalc.asp
  4. “Second Life world may be haven for terrorists”: http://www.telegraph.co.uk/news/uknews/1551423/Second-Life-world-may-be-haven-for-terrorists.html
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