Comparing apples and oranges

Comparing salaries across national borders is a tricky thing to do. I was reminded of this problem while reading a post from Female Science Professor. My experience has been limited to the US and Canada but, even there, it's hard to really contrast these places. When I worked in Montreal, I had easy access to fast public transit, most things in walking distance, inexpensive housing but a much lower salary. In Seattle I have reluctantly concluded that, given my work location, a car was essential.

So how do you compare salaries?

This is actually a general problem in Epidemiology. Socio-economic status is known to be an important predictor of health. But it is tricky to measure. Salary needs to be adjusted for cost of living; hard even when you have good location information (which, in de-identified data you may very well not). Even in large urban areas, costs can be variable depending on location.

Alternatively, there are non-financial rewards (that are status boosting) in many jobs; how do you weight these? Adam Smith noted back in the Wealth of Nations that the a prestigious position was related to lower wages. How do you compare equal salaries between a store clerk and a journalist?

Is a hard problem and I really lack a great solution. But it's worth putting some real thought into!!