AIM Framework glossary
Housing PM Decomposition
Canonical definition
Housing PM Decomposition provides a concrete example of how PM components distribute across different purchaser profiles for the same Object. Example Housing PM Decomposition (Illustrative Calculation) House purchase price: \$800,000 | Component | Cash Buyer (with portfolio) | First-Home Buyer (80% LVR, 30yr @ 6%) | |--------------------------------------------------|-----------------------------|---------------------------------------| | PA (shelter, construction, land) | \$250,000 | \$250,000 | | PI (home office, workshop) | \$50,000 | \$50,000 | | PM(visible) (location, size beyond adequacy) | \$200,000 | \$200,000 | | PM(ownership) signal gained | +\$300,000 | +\$300,000 | | PM(portfolio) signal gained | +\$150,000 | \$0 | | PM(interest) extracted | \$0 | \$926,560 | | Net Mimetic Position | +\$150,000 | -\$626,560 | | Total cost over term | \$800,000 | \$1,726,560 |
Explanation
The cash buyer with an existing asset base gains all status signals (ownership + portfolio + visibility) while incurring zero extraction, producing strongly positive NMP. The first-home buyer gains ownership signal but incurs PM(interest) extraction exceeding the entire purchase price, producing strongly negative NMP. The A-function (shelter) and I-function (workspace) are identical; the M-outcome diverges by 1.4 million dollars based solely on Individual purchasing power and financing structure. - PA: Cost of shelter function, construction, maintenance, land sufficient for footprint. - PI: Cost of I-enabling features beyond basic shelter, space for intrinsic pursuits, home office, studio, workshop space. - PM(visible): Premium for observable characteristics that signal Status, location prestige, size beyond A-I adequacy, architectural distinction, brand recognition. Approximately constant across purchasers of the same Object. - PM(ownership): Premium paid because owning rather than renting signals wealth, stability, and class position. Present in any ownership purchase regardless of the Object's other characteristics. Signal gained is approximately constant across purchasers of the same Object. - PM(portfolio): Additional premium signalling wealth magnitude through quantity or breadth of holdings. Accrues to those whose ownership of the Object forms part of a visible asset base, whether multiple properties, diversified investments, or accumulated holdings across Object classes. - PM(interest): Interest paid on debt financing the purchase. As Interest is PM on Money itself, this represents PM extraction layered on top of the Object's price. Entirely Individual-relative: ranges from zero (cash purchase) to multiples of purchase price (high-LVR, long-term financing). Even a modest dwelling in a low-status area carries PM(ownership) and, if debt-financed, PM(interest). There is no PM-free housing purchase in societies where ownership correlates with Status and debt-financing is the dominant access mechanism.
Epistemic status
Framework-Specific Construct.
Derivation
Related terms
- Net Mimetic Position (NMP)
- Mimetic Premium (PM)
- A-Floor Erosion Principle