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True as far as it goes, but the fair response to this is: who really cares how rich a country is, normalized to its size? In the If you care about the country
by awhitby 4y ago
True as far as it goes, but the fair response to this is: who really cares how rich a country is, normalized to its size? In the
If you care about the country as people, then median is better as you point out. But if you care about the country as country, then total is generally more interesting (to understand, say, military power).
China's a big deal despite not being particularly rich per capita. On the other hand, the leaders in per capita GDP, outliers like Macau and Luxembourg, are not usually countries people are interested in.
- grog454 4y agoA per capita metric might have a lot more influence on where someone chooses to live, at least for those privileged enough to have a choice.
- aetherson 4y agoFor example, you are trying to figure out which country has a good pro-growth policy regime. You don't want to imagine that India, let's say, has done better at economic development than South Korea, despite India's higher GDP. As one of many examples.
- junofan 4y agoGDP per capita is a yardstick for labor productivity. I’m generally interested in the cost of doing business in various places. GDP per capita is a good metric.
- Aperocky 4y ago> GDP per capita is a yardstick for labor productivity. Or how much oil will gush out of the ground if you drill a hole in the right place.
- hammock 4y ago>drill a hole >labor I believe you are saying the same thing
- myownpetard 4y agoOnly if the value of a hole of equivalent dimensions is constant and independent of location. There's a whole Disney movie that demonstrates not all holes are created equal.
- PeterisP 4y agoWell no, the whole point of measuring country differences in labor productivity is that in some countries spending x hours to drill a hole in the ground is vastly more productive than in others.
- myownpetard 4y agoThe point here is that, if we want to use GDP as a proxy for labor productivity, then including wealth from extractive industries isn’t that useful because it tells us much more about the geology of the country then about the labor force.
- tomjakubowski 4y agoIt's a yardstick for productivity per capita, from both labor and capital. I mean, I guess that's just saying "gross domestic product per capita" in different words.
- pif 4y ago> median is better as you point out As the grandparent post correctly stated, median GDP cannot be computed. In cannot even be defined!
- rbanffy 4y agoIt assumes a normal-ish distribution. Mode would be a better single-number measure, but it’s the income x number of people curve that carries the important message.
- pif 4y agoYou didn't read the opening comment from jstx1, did you? GDP is not income. Personal GDP is not defined.
- rbanffy 4y agoI'm sorry I didn't make myself clearer. I'm not talking about GDP, but income (which has a distribution curve). OTOH, we can see that curve in a global context, of GDP per capita across countries. It's a boring curve, very power-law ish with slightly odd peak in the 30K-40K region. https://imgur.com/a/BqsQDT9 https://imgur.com/a/BqsQDT9
- rbanffy 4y ago> But if you care about the country as country, A useful measure would be GPD per billionaire. Since they amass political power alongside the economic one, they are de facto political leaders.