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Originally Posted by meanjoe75fan
I read that article. I'm sorry, but the math in there was pretty far off, and the assumptions tenuous.
1. 51¢/mi is the IRS "standard depreciation" and reflects ALL costs (fixed and variable) divided by miles driven for the "typical motorist." What you need to look at is the *marginal cost* of driving that extra mile (gas, some of the maintenance, some of the depreciation.) That's a LOT less than 51¢!
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He does address this and evaluates an inexpensive vehicle and it still comes out to 34 cents per mile. It is with this figure that he calculates the $800/year per mile farther away from work. It would be even more if he used the 51 cent number.
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2. Taking out a 30-ye mortgage implies that your "short commute" remains constant over three decades: no job changes or moves within the company. That's laughable! (This would be a better comparison for a rental, IMO.)
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I don't see how this pertains to the article. He is just saying that nobody ever seems to think about distance from work. If you have to travel farther to work due to a new position would you not even consider moving? Would you not even consider looking for a new job?
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3. Economists generally value a persons time at 70% of their wage rate. So $25/HR for "lost commute time" implies a near $40/HR hourly rate! What are we, strippers and dealers?
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I think that the number he uses here is perfectly reasonable. If you didn't have that job you wouldn't be traveling that distance. Why shouldn't your time spent due to that job be summed together?
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4. The math also assumes no countering benefits in exurban living: only cheaper housing. Stuff like cleaner air, less noise, crime, better schools are totally ignored!
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I agree here. Its a financial evaluation. But, what is stopping you from finding a job outside the city so you can have the best of both worlds? That is what I did.