Yurt place or mine?

[I am on vacation now, so I dug up an old piece that I never posted.  Also check out the piece on kidney markets, which the WaPo requested me to write.]

Back in 2009 I did a post on “The Aesthetics of Inequality.”  Here’s one excerpt:

A peasant village perched on a hillside in a third world country can be aesthetically beautiful, but a shantytown of former peasants on the edge of a large modern urban area (even if the peasants are now better off) is aesthetically ugly.

I was reminded of this while watching a recent video of Ulaanbaatar, which is attracting mass migration from the Mongolian countryside.  There are few more picturesque scenes of rural poverty that a bunch of yurts set up on Mongolia’s vast plains, under a cerulean blue sky:

Screen Shot 2015-09-21 at 4.01.37 PMFortunately, a mining boom has made Mongolia rich, and the peasants are flocking to the cities, and put up their yurts in shanty towns on the edge of Ulaanbaatar—which now has a majority of Mongolia’s population.

Screen Shot 2015-09-21 at 4.05.00 PM

The lady who narrated the show was a Westerner.  And she couldn’t quite get past the idea that this urbanization didn’t look very attractive:

It’s so funny because in the countryside it seems natural and it seems clean and it seems lovely, and here this is just poverty-struck, and so not natural.

It’s easy for Westerners and/or upper class people to think they know what’s best for the poor. But unless they’ve actually lived that life, they may end up substituting aesthetic judgments for utilitarian criteria. The Mongolians had to decide whether their country was going to be a place of yurts, or a place full of large open pit mines and cities with high-rise apartment buildings.  They chose the latter. The Mongolian she interviewed pointed out that Mongolians wanted to live in these modern apartment buildings because “they don’t have to make fire anymore, they don’t have to carry water anymore.”  They moved to the city to increase their chances of getting a modern place to live.  (Although it looks like most face a long wait.)

The average income of Hispanics is about 79% of the average income of all Americans. The IMF says that per capita income in Spain (PPP) is about 62% of per capita income of the US.  And yet in my mind Hispanics seem “poorer” than Spaniards. My mental image probably reflects the fact that I find Barcelona and Sevilla to be more attractive that the typical Hispanic neighborhood in a large Sunbelt city.  It’s fine to have those images in your mind, as long as your don’t confuse aesthetics with utility.

PS.  My God! Some of my 2009 posts were really long-winded.

PPS.  Yes, my previous example is slightly distorted by the above average size of Hispanic families, but not enough to change my point.



25 Responses to “Yurt place or mine?”

  1. Gravatar of E. Harding E. Harding
    30. December 2015 at 10:01

    Well, Spain’s in the aftermath of a depression, so U.S. Hispanics now seem richer by default.

  2. Gravatar of Jim Glass Jim Glass
    30. December 2015 at 10:49

    Off topic, but as the cat host is away…

    “Don’t target NGDP, target NGO!” (Nominal Gross Output)



  3. Gravatar of Scott Sumner Scott Sumner
    30. December 2015 at 12:35

    E. Harding, The problem with that explanation is that my last visit to Spain was before 2008, and it seemed richer even then.

    Jim, I don’t see any good reason to target NGO.

  4. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    30. December 2015 at 13:50

    Barcelona is one of the richest cities in Spain.


    I think Europeans regularly underestimate the wealth in the US as the houses and public places seem pretty shabby.

  5. Gravatar of Nathan Nathan
    30. December 2015 at 14:52

    The government taking money from its citizens to make big fancy useless buildings is the sort of thing that’s likely to make a place look richer while actually making its citizens poorer. No idea whether this is the case in Spain, but it certainly seems possible to me.

  6. Gravatar of E. Harding E. Harding
    30. December 2015 at 15:13


    -I think you misunderstood me. I said/meant that these days, I think U.S. Hispanics seem richer, as the unemployment rate in Spain is much higher.

  7. Gravatar of Benjamin Cole Benjamin Cole
    30. December 2015 at 17:18

    Spaniards in Spain vs Hispanics in the US.

    Well, Scott Sumner himself has said that income alone is not an all-inclusive metric. Kevin Erdmann is doing great work on the cost of housing, and we know that in Spain people get healthcare “for free.” Does one need a car?

    The typical wage earner in Spain gets six weeks off a year.

    How much of income is diverted to “national security” or other public services which do not return a benefit to the public?

    I would rather live in Barcelona than a colonia outside Houston. But each to his own.

  8. Gravatar of Floccina Floccina
    30. December 2015 at 18:19

    Great post Scott. I think people often mistake sloppiness for poverty.Sometimes some people make it to high income but are sloppy and so make a big expensive property look bad.
    I think aesthetics is why people are so concerned with obesity among the poor. I lived in a poor country for a while and poor people there were never fat.

    @Benjamin Cole, but if you consider “free healthcare” you need look at income net of taxes. Of course you need to use PPP values.

  9. Gravatar of Floccina Floccina
    30. December 2015 at 18:34

    Also the Amish are poor by USA standards as are the folks in Kiryas Joel but live in appealing homes. Perhaps some folk just disapprove of how Mexican American choose to live.

  10. Gravatar of Gary Anderson Gary Anderson
    30. December 2015 at 21:39

    Thoughtful post.

  11. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    31. December 2015 at 04:42

    I don’t have data, but anecdataly there are way more Europeans (from Spain and elsewhere) who move to the US for economic reasons than the other way around. For all their waxing about six weeks of holiday and tax-payed health care, very few Americans will actually take the cut and want to live on a middle class Spanish salary of 15,000 USD take-home-pay.

    This immigration asymmetry happens despite the fact that Europeans have to struggle to get a US visa, while most Americans can get a EU visa for the asking (a high percentage can even get a EU nationality for the asking if one of their ancestors comes from the blood-citizenship countries like Germany or Italy).

  12. Gravatar of Christian List Christian List
    31. December 2015 at 04:48

    “It’s fine to have those images in your mind, as long as your don’t confuse aesthetics with utility.”

    Or maybe aesthetics is also about utility? Most people eat with their eyes first, don’t they? I agree with Benjamin Cole to some extent. Income is not everything. I think about welfare, leisure time and healthcare as an example. Also history, wealth and culture. And what about costs of living?

    I really love your essay about kidney markets in the WaPo. The other piece by Francis Delmonico and Alexander Capron seems really weak. They nearly make no arguments. And when they do they contradict themselves.

  13. Gravatar of Capt. J Parker Capt. J Parker
    31. December 2015 at 08:29

    1) Fully agree with Cristian List that aesthetics do provide utility that’s why a Manhattan apartments with a view are a lot more expensive.
    2) Fully agree with Cristian List on the Transplant article.
    3) Best wishes to Dr. Sumner (and his thoughtful commenters) for a happy and prosperous new year. I’ve learned a lot here. I hope those long posts keep coming.

  14. Gravatar of Scott Sumner Scott Sumner
    31. December 2015 at 09:18

    Everyone, Lots of very good arguments, on both sides of the question. I’d encourage people to read the other comments, as there are no easy answers here. The video is also worth watching and thinking about.

    Luis, That’s right, of course Sevilla is not rich.

    E. Harding, I can’t comment because I have not been to Spain recently.

    Christian and Capt. Parker, Thanks for the comments on the kidney transplant article.

  15. Gravatar of Floccina Floccina
    31. December 2015 at 11:11

    The Muslim majority areas in Belgium and France may also look unappealing. Culture matters. Many intelligent Americans may believe in cultural relativism and yet find other cultures quite unappealing to the eye.

  16. Gravatar of collin collin
    31. December 2015 at 13:43


    Why do the Hispanic neighborhood ‘feel’ worse than the average Spanish neighborhood.

    1) The 79% is an average across the US population and a good portion are very assimilated in the United States general neighborhoods.

    2) Cost Of living. Also the most Hispanic neighborhoods in the Southewest where it more costly than Spain in general.

  17. Gravatar of Frank Taussig Frank Taussig
    1. January 2016 at 01:47

    I am visiting family in Montreal for the holidays, and on my way back from a party tonight we listened to an interview with a social scientist who studies poverty. She interviewed large numbers of african refugees to Canada. They were glad to be in Canada for things like healthcare , abundant clean water, etc. But they were profoundly unhappy, in fact much less happy then before. Why?

    Being dirt poor in a village of dirt poor people they found happiness in non material things like friendship and play. The “poverty” was invisible. In Canada, they are dirt poor but now they are surrounded by people with iphones, beautiful cars, big houses etc. and they are faced with the realization that they may never have these things and are thus weighed down by some very negative emotions.

    The key seemed to involve expectations. They were motivated to come to Canada because of the flawed logic: Canadians live in big houses, I will become a Canadian, I will live in a big house.

    Happy New Year to all !

    Prof Sumner, thank you for your continued devotion to this blog even as your time is increasingly in demand elsewhere. I must say the trajectory of your career has been astonishing.

  18. Gravatar of Ray Lopez Ray Lopez
    1. January 2016 at 02:59

    The difference that Sumner misses is that urban life has higher density than country life. Higher density = ugly.

    New Year’s resolution: stop posting here, stop reading this tripe.

  19. Gravatar of Bill Bill
    1. January 2016 at 06:43

    I think that’s exactly Prof. Sumner’s point – there’s a perception that urban life/higher density living is ugly, but that perception isn’t necessarily correct. I’d much rather live in a small apartment in a city with good transportation, great restaurants, art galleries, museums etc etc than in a big house with a triple garage in the country. But forget about my opinion. Just look at the sky-high house prices in London and New York.

    One other point: while I agree with the gist of Prof. Sumner’s blog, I’m not sure that relative income is the best metric to use. I spend a lot of time in Southern Italy – not exactly the richest region in Italy. Young Italians can move to anywhere in Europe – the UK, Germany, Sweden for example – without any restrictions. Some do, of course, but very large numbers choose to stay, and many come back home after spending some time abroad. Why? Whatever the reason it can’t be based on income levels.

  20. Gravatar of am am
    1. January 2016 at 08:07

    Strangely enough was in a nice place today for New Year’s Day lunch. Family with quite a few kids floating about. Got chatting and they were back home from Ulan Bator for the hols. He works for some European gov or ngo which is helping Mongolia develop their mining industry. Africa to Ulan Bator. Obviously prospering and maybe the first generation to do so – from the African house. Grass hut to yurt. No. Where they live has central heating. Maybe the Mongolians will catch up. Let’s hope that they do.

  21. Gravatar of Don Geddis Don Geddis
    1. January 2016 at 09:25

    Bill: One of the reasons that the Eurozone is not an optimum currency area, is that language and cultural barriers wind up restricting labor movement, even if immigration is legally allowed.

  22. Gravatar of Scott Sumner Scott Sumner
    1. January 2016 at 12:37

    Collin, I don’t agree about the cost of living. Most Hispanics don’t live in high cost areas, I see no evidence that the average Hispanic cost of living exceeds the average American cost of living.

    Thanks Frank.

    Bill, Good points, but far more southern Italians move to America, than Americans move to southern Italy. Take away retirees, and I’d guess almost no Americans move to southern Italy.

    am, Interesting.

    Don, Good point.

  23. Gravatar of TallDave TallDave
    1. January 2016 at 16:45

    Funny, someone on MR the other day said “1 in 6 people in your country is on food stamps!” His country’s per capita GDP is well below our poverty line.

    There are probably more wealthy Hispanics and blacks in the United States than people would expect, because their poor tend to be concentrated in urban neighborhoods, while poor whites tend to be rural — the average is lower, but the distribution is not that different, so that something around a quarter to a third are over the median income.

  24. Gravatar of LK Beland LK Beland
    2. January 2016 at 13:04

    Concerning European vs USA utility, we should not forget the effect of life expectancy. E.g., in France or Italy (and even Canada), it is 3-4% higher than in the US. We should adjust lifetime utility accordingly. This ajustement is of the order of 10-20% of the GDP PPP per capita gap between these countries and the US.

  25. Gravatar of ssumner ssumner
    2. January 2016 at 18:03

    Talldave, Good anecdote.

    LK, Good point.

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