5 ms·

You raise some good points. What's a better measure, in your opinion?

by cgmg 9y ago

adventured 9y ago
The foundational problem of PPP, is contained in that it attempts to do something remarkable and then doesn't actually do it at all. Is it a really great idea to have an accurate comparison of the standard of living and economic capabilities (both have a high correlation to non-PPP GDP), on a relative basis, between nations? Yes! Ten times over, yes. Do the annually published PPP numbers actually do anything like that? No, not even close. PPP is a nice idea, that's all it is unless you want to expend extraordinary sums of money and labor to be on the ground, with extremely objective and well trained experts doing the comparisons in an extremely scientific manner (rather than a clown at the IMF throwing darts based on hamburger prices). What's a better measure? This is where the laziness of common PPP numbers comes into play. The better measure is to get into the mud and get really dirty, in volumes of accurate data, tracking, observation, experience. In reality we don't even have mediocre access to accurate, detailed economic data for the majority of the 195 nations. On that single fact, PPP collapses as it is. How accurate is the economic data that we have for eg Brazil (207 million people), and how intricate can we get while maintaining that accuracy? In this case, Brazil is reasonably representative of the global median. We have low quality vague guesses at best. Below Brazil, it just gets that much worse. It's extremeley difficult and expensive to do a nation to nation comparison which is then adjusted subjectively to measure relative condition. So many things would inherently come into play that can't be easily measured. It would require immense on the ground effort and measurement, on a constant basis, along with ideally at least semi-accurate wider economic figures from the national/regional/local government structures inside a given nation (only a few dozen nations have anything like that).
credit_guy 9y ago
A better measure is the straight GDP/capita. Here's the numbers for the 3 countries mentioned, to which I added the US, China and Estonia (source World Bank [1]): US: $57.6k Estonia: $17.6k China: $8.1k Khazakhstan: $7.5k Kyrgystan: $1.1k Tajikistan: $0.8k GP's argument stands with the straight GDP/capita, except for the comparison to Estonia, which was a side remark anyway. [1] https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_pcap_cd&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:EST:KAZ:KGZ:TJK:USA:CHN&ifdim=country&tstart=535352400000&tend=1482123600000&hl=en_US&dl=en&ind=false https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...

You raise some good points. What's a better measure, in your opinion?

by cgmg 9y ago

You raise some good points. What's a better measure, in your opinion?

The foundational problem of PPP, is contained in that it attempts to do something remarkable and then doesn't actually do it at all. Is it a really great idea to have an accurate comparison of the standard of living and economic capabilities (both have a high correlation to non-PPP GDP), on a relative basis, between nations? Yes! Ten times over, yes. Do the annually published PPP numbers actually do anything like that? No, not even close. PPP is a nice idea, that's all it is unless you want to expend extraordinary sums of money and labor to be on the ground, with extremely objective and well trained experts doing the comparisons in an extremely scientific manner (rather than a clown at the IMF throwing darts based on hamburger prices). What's a better measure? This is where the laziness of common PPP numbers comes into play. The better measure is to get into the mud and get really dirty, in volumes of accurate data, tracking, observation, experience. In reality we don't even have mediocre access to accurate, detailed economic data for the majority of the 195 nations. On that single fact, PPP collapses as it is. How accurate is the economic data that we have for eg Brazil (207 million people), and how intricate can we get while maintaining that accuracy? In this case, Brazil is reasonably representative of the global median. We have low quality vague guesses at best. Below Brazil, it just gets that much worse. It's extremeley difficult and expensive to do a nation to nation comparison which is then adjusted subjectively to measure relative condition. So many things would inherently come into play that can't be easily measured. It would require immense on the ground effort and measurement, on a constant basis, along with ideally at least semi-accurate wider economic figures from the national/regional/local government structures inside a given nation (only a few dozen nations have anything like that).

credit_guy 9y ago

A better measure is the straight GDP/capita. Here's the numbers for the 3 countries mentioned, to which I added the US, China and Estonia (source World Bank [1]): US: $57.6k Estonia: $17.6k China: $8.1k Khazakhstan: $7.5k Kyrgystan: $1.1k Tajikistan: $0.8k GP's argument stands with the straight GDP/capita, except for the comparison to Estonia, which was a side remark anyway. [1] https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_pcap_cd&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:EST:KAZ:KGZ:TJK:USA:CHN&ifdim=country&tstart=535352400000&tend=1482123600000&hl=en_US&dl=en&ind=false https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...