1 Jacob Adjusted For Inflation (JAFI)

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ducknald_don
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by ducknald_don »

I thought PPP was relative to the US dollar so the conversion rate will be 1 for USD.

Of course there are several ways to crack this nut. If your are concerned from a moral perspective then it's hard to argue you are in the wrong if you are well below the median level of consumption.

Climate change is a problem caused by the wealthy, until they start reigning in their consumption your sacrifices aren't going to be very meaningful.

7Wannabe5
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by 7Wannabe5 »

@ducknald_don:

Right, but the purchasing power parity in the U.S. does not directly correlate with total global GDP expressed in $U.S.

It is hard to wrap head around, but basically it is the difference between recognizing that the lifestyle which costs approximately $11,000 year in the U.S. would be sustainable if everybody in the world had that same lifestyle which would actually cost less in most other parts of the world vs. dividing total lifestyle available on the planet expressed in $U.S. by total world population without recognizing that this would buy smaller basket of goods for some humans.

IOW, attempting to replicate the lifestyle of a middle-class Mexican or Indonesian in the U.S. would cost more in U.S. non parity adjusted $ than it would in Mexico or Indonesia. So, is it more fair to divide $$ equally or lifestyles equally?

oldbeyond
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by oldbeyond »

Aren't we complicating the calculation? The US ecologial footprint is 8.0, biocapacity 1.7 and US GDP/capita 65297. 65297/(8/1.7) gives $13875/capita. Perhaps I'm missing some part of the argument as this is quite a bit higher than what we've discussed before.

7Wannabe5
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by 7Wannabe5 »

@oldbeyond:

The calculation is a bit of a rough hash any way you do it. The higher number you just proposed is based on national boundary. The lower number Jacob references is based on global boundary. The compromise number I suggested is based on global boundary corrected for basic cost of living. For instance, if a grouchy old woman in Bangladesh wanted to live by herself in a tiny apartment in a reasonably safe setting which would also be reasonably close to her children/grandchildren and cook herself a semi-vegetarian diet, this lifestyle would cost her less in US$ than it would cost me. IOW, I am correcting for the fact that I think forced relocation away from family in order to reduce personal spending level is an unreasonable burden on 1st world dwellers. OTOH, I don’t think the HCOL correction should apply if relocation is to increase potential earnings or yuppie/hip lifestyle. MMV.

wolf
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by wolf »

1 JAFI for 2021 is $9,413

edit: corrected the number afterwards
Last edited by wolf on Fri Jan 14, 2022 10:25 am, edited 1 time in total.

white belt
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by white belt »

wolf wrote:
Wed Jan 12, 2022 11:23 am
1 JAFI for 2021 is $9,148
How are you arriving at this number? When I plug in $7k in 2007 to the inflation calculator linked in the first post, I’m getting 1 JAFI as $9413.

wolf
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by wolf »

correct white belt.
I used the inflation calculation too early. They didn't used the latest December inflation.

1 JAFI for 2021 is $9,413 (rounded)

WFJ
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by WFJ »

What is a JAFI? (Rent included?)

The biggest expense by far is rent (70%). Without the cost of rent, my yearly spend is probably $6k-$8k.

macg
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by macg »

I am in the same boat, if I remove rent from both the JAFI calculation and my spending, I am at around 1/2 JAFI. And with where and how I want to live, I don't think that will change much...

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Slevin
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by Slevin »

@macg, @WFJ I think the answering thread is linked several times on this thread, I just grabbed a random recent link to it
jacob wrote:
Wed May 26, 2021 8:51 am
See this old thread where imputed costs were litigated. It goes on for several pages...
viewtopic.php?p=120667#p120667
jacob wrote:
Wed May 26, 2021 7:56 am
There are two ways to see this. One adjusts for inflation and the other one just recalculates the number based on GDP, overshot, and population annually.

Which one you pick depends on whether you're focusing on sustainability or whether you just want to "beat jacob's track record".

If you just want to compare to my historical "spending", my original number was $6000 but that's 20 years ago and clearly $6000 in 2001 is not the same as $6000 in 2021. This is useful and important so as not to get discouraged when reading older FIRE works.

If you're more interested in the sustainable aspects, you should recalculate annually. The numbers lag by a couple of years. It has remained remarkably stable over the years as economic growth (which includes inflation) get eaten up by corresponding population growth and a deepening overshot. In 2019 it was $6750 IIRC.

But guys, it's just a rule of thumb that gets you to an actionable number as opposed to a bunch of feel-good handwaving about buying EVs and solar panels. Some things to consider for the sustainably oriented...
  • It doesn't account for purchasing power parity or which country you spend it in although you clearly "burn" more in some countries than others.
  • It doesn't account for what the money is spent on (e.g. organic), but spent money quickly makes it into the rest of the economy where it's likely spent on "the average basket of goods".
So the main point is to get within the ballpark && "not spend evil". E.g. if you spend $6750 on nothing else but burning diesel fuel in barrels, you're part of the problem. And if you're promoting sustainable practices while at the same time you're spending $15000 or $30000 per year, you'd have to make a much stronger argument for your spending practices (e.g. "I'm building post-collapse infrastructure to be used by future generations"). But if you have normal consumer patterns (the same as those the global overshoot number is based on ...) and stay around $6750, you're on the high road.

zbigi
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by zbigi »

jacob wrote: It doesn't account for purchasing power parity or which country you spend it in although you clearly "burn" more in some countries than others.
I thought the argument was that it ultimately doesn't matter whether you spend the 1 JAFI in Switzerland/Norway or in some poor country - because a dollar is a dollar, once you return it back to the economy (via spending), it will most likely be spent irresponsibly and in ecologically damaging way by people who got that dollar. So only the actual amount of dollars matters, not how much you got for them in exchange.

I'm not saying this argument is bulletproof (thinking about higher order effects of spending is hard).

7Wannabe5
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by 7Wannabe5 »

@zbigi:

There is an egalitarian principle or philosophy inherent in the eco_Jacob that does not correlate to how the real world currently functions. This egalitarian principle is inherent in the choice to divide the total atmospheric or ecological capacity of the planet by the total human population of the planet, thus giving each human a "fair" share. The point I was attempting to make upthread regarding the application of PPP was that this makes the division fair in terms of "lifestyle dollars" rather than dollars.

There are other possibilities to consider. One would be the way in which the real world does currently function which is that use of total atmospheric and ecological capacity is "granted" in proportion to production. Another would be something like the Greenfield model in which personal consumption is minimized and any excess production rights are given away rather than invested. A third possibility, which would be the most eco-centric and misanthropic, would be limiting personal consumption and purchasing land (inclusive of power to maintain boundaries) with excess production and limiting human habitation of the land you purchased (starve out the other humans.) Nature does not give a fig about per capita human, it just responds/reacts to consumption/burn per green solar acre. A somewhat kinder variation on this would be something like the paternalistic agrarian model in which you might hire some other humans to work on your preserve rather than starving them out. Really, this is kind of what is going on with the ERE model too, but it's more efficient (better able to support higher global human population), because you use the extra production you are not spending on personal consumption to third-party-at-a-distance hire other people to work for the various modern industries in which you have invested your money. So, it's a compromise solution, probably the best that can be done, but the mid-game is kind of murky if the end-goal is 10 billion people living happy unique although roughly egalitarian lifestyles on 1 eco-jacob PPP per year.

Salathor
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by Salathor »

zbigi wrote:
Thu Feb 17, 2022 2:13 am
I thought the argument was that it ultimately doesn't matter whether you spend the 1 JAFI in Switzerland/Norway or in some poor country - because a dollar is a dollar, once you return it back to the economy (via spending), it will most likely be spent irresponsibly and in ecologically damaging way by people who got that dollar. So only the actual amount of dollars matters, not how much you got for them in exchange.

I'm not saying this argument is bulletproof (thinking about higher order effects of spending is hard).
I would suspect this is not true. Think of it this way: if you manage to subsist on $5000 a year in the US, you are using very few resources. Conversely, there are many poorer countries where a $5000 year spending limit can be very resource intensive due to lower fixed costs--ie, housing, etc. A $5,000 budget in China might involve quite a bit more conspicuous consumption and associated environmental damage than that same spending in the US.

jacob
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by jacob »

I'd restress that parsimony is key to the indicator. If you want to really compare impact then you need a much more elaborate system of keeping track of resource usage like https://www.amazon.com/Radical-Simplici ... 865714738/ .

WFJ
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by WFJ »

Slevin wrote:
Wed Feb 16, 2022 3:38 pm
@macg, @WFJ I think the answering thread is linked several times on this thread, I just grabbed a random recent link to it
Thanks, I started to read that quite detailed post and was hoping for the "Right answer". I'm just trying to figure out some of the terminology used on this forum. Don't budget near as closely as the average ERE poster and will start. My consumption heuristic has always been "buy the minimum acceptable" product service over a 5-year time period (quality over quantity) and to never come close to using anything over passive investment income. Assume it's pretty close to a JAFI, but due to a different mindset.

WFJ
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by WFJ »

jacob wrote:
Thu Feb 17, 2022 11:48 am
I'd restress that parsimony is key to the indicator. If you want to really compare impact then you need a much more elaborate system of keeping track of resource usage like https://www.amazon.com/Radical-Simplici ... 865714738/ .
In this regard, I'm probably not close to a JAFI. I buy some harmful products for the environment (plastic, labor, complex supply chain and shipping) used in a hobby, but at massive discounts. Full price of four recent products were probably over $6000, and all were bought for less than $1000. I will be able to use the products for 3-7 years as they are the highest quality (old models). The hobby has amazing health benefit, physical and mental but assume the retail price more accurately reflects the cost to the environment regardless of the web of other benefits it provides.

A more practical example would be comparing the purchase of an 800 sq ft adobe house in the CBD for $1,000,000 vs a 4000 sq ft home in the burbs for $500,000. Former is more expensive, higher JAFI. While the latter is clearly worse for the environment, although lower JAFI. This is clearly not going to be resolved in a short post.

take2
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by take2 »

WFJ wrote:
Thu Feb 17, 2022 3:21 pm
A more practical example would be comparing the purchase of an 800 sq ft adobe house in the CBD for $1,000,000 vs a 4000 sq ft home in the burbs for $500,000. Former is more expensive, higher JAFI. While the latter is clearly worse for the environment, although lower JAFI. This is clearly not going to be resolved in a short post.
Is CBD = central business district? If so, in what CBD are you finding an Adobe house?

WFJ
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by WFJ »

Many examples of this in the Southwest (NM and AZ). Large plots of land, homes built in the 20's-50's when it was farmland. Mother grew up in adobe home in CDB, relatives still live in these homes. Homes would have to be torn down as probably violate every building code, now passed down from generation to generation. LA used to have a lot of these but haven't been there in a decade.

white belt
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by white belt »

@WFJ

That example demonstrates why some in the collapse/permaculture/green spaces are more interested in retrofitting. As you point out, tearing down still functional housing to build new housing might not make sense from an energy perspective. Slightly related thread on retrofitting: viewtopic.php?t=11796

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Jean
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Re: 1 Jacob Adjusted For Inflation (JAFI)

Post by Jean »

my ego was hurt when i noticed that i wasn't listed among the 1-jafi ereers, and i deemed necessary to let you all know, that i've been bellow jafi for several years. maybe my journal is too boring.

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