Does the "Two can live as cheaply as ?" assumption refer to TOTAL spending?

I am trying to calculate the most accurate assumption to use in the "Two can live as cheaply as" field, using our (my husband and my) specific budget figures. However, I don't know whether the program assumes this figure applies to total spending, including "off the top" expenditures (like housing), or just discretionary consumption. Could you please clarify?


dan royer's picture

This variable refers to the economy of scale that you take advantage of by living together. I don't think I could list every advantage and it would vary by household, but it costs one person much less to have the same living standard if the other person dies because there's just one mouth to feed, one car to buy, one set of clothes to purchase, one check to pay at the restaurant, etc. Put the other way, two people can live in one house--no need to buy two houses.

The variable applies to the whole economy, not just discretionary spending--but the difference (children aside) between discretionary spending and per-adult living standard is the default 1.6.

Thanks for the clarification.

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