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The methodology finally addresses a pet peeve of mine to adjust based on prices and hours worked: "we ranked 178 countries using three measures. The first is GD

The methodology finally addresses a pet peeve of mine to adjust based on prices and hours worked: "we ranked 178 countries using three measures. The first is GDP per person at market exchange rates. It is simple and intuitive, and widely cited. But it ignores price differences between countries. The second measure adjusts incomes for these local costs (known as purchasing-power parity, or PPP). This offers a better guide to living standards but one that takes no account of leisure time: the share of people in work, and how long they work, varies by country. Our final yardstick accounts for both local prices and hours worked"

tetris11 1y ago
Why is average still such a persistent metric though? Isn't median more representative of an individidual's actual purchasing power? If they paired average metrics with gini coefficient, I'd be happy
- __mharrison__ 1y ago
  What would be your recommended way to combine them? Or just show them separately?
  - tetris11 1y ago
    show them separately - high mean, high Gini, and let the reader figure it out
- dredmorbius 1y ago
  NB: "average" can mean any of three measures of central tendency: the mean (sum/count), the median (middle value), or the mode (most frequently occurring value). All three may be valid choices in specific contexts. Whilst it's common to interpret "average" as "mean", this isn't strictly accurate or reliable. The Economist's article errs in failing to distinguish which measure of central tendency is actually meant by "average".
xnx 1y ago
Why measure "rich" at all and just go with life satisfaction surveys?
- eastbound 1y ago
  North Africa countries have very very low suicide rates for the same reason. Many factors can change your self-reporting of events you go through.
  - spwa4 1y ago
    Morocco suicide rate: 7.2/100k Spain suicide rate: 8.4/100k Portugal suicide rate: 11.5/100k And seems to vary with the economic situation just like everywhere else. Plus quite a few North African countries ... well, they're just lying. Look at Egypt, even Tunisia ... these figures are just not possible, they're either misclassified or just lies.
- dismalaf 1y ago
  Because some cultures are "complaining" cultures, meaning they complain socially. Others will find fault with the tiniest thing, even if 99% of everything is perfect. And others can be incredibly content with very little. It gives absolutely no insight into how good life actually is anywhere.
- Henchman21 1y ago
  How about we measure how many are in poverty and try to push society to make that number zero everywhere?
NalNezumi 1y ago
Can someone more versed in macro economics clarify to me, to what extent "price differences between countries." goes? Like are we just comparing simple goods: grocery, white wares, cars, fuel/electricity etc the price of these things there. Or are we also considering things such as: need to save money for Healthcare, University, credit card transaction fee, housing cost (mortgage), required amount of fuel for basic functioning of everyday life? The latter is basically stuff that is either cheap or free in certain places while astronomically high in other (US, but I guess housing price is everywhere if city). I feel like layman AND economist doesn't truly account (or even understand) how different some countries have it on those metrics; A person in Tokyo or most capital cities in Europe can get away with ZERO fuel + car cost, while for Americans that's a death sentence. Same for Healthcare. So comparing those prices doesn't even make sense to begin with, but leaving it out is a major boost to places where salaries are high (US) but the (hidden) cost are not measured.
- RestlessMind 1y ago
  > The latter is basically stuff that is either cheap or free in certain places Healthcare is absolutely not free anywhere. It maybe that the costs are indirect via government taxation and benefits are curtailed via rationing or simply unavailability of certain types of care.
  - NalNezumi 1y ago
    Sure. But that again depends on calculation? If we are talking about "disposable income" in the average statistic (after tax) then ofc anywhere that does it through tax will have lower purchasing power because it's (easy to be) included. While places where it's mostly out of your pocket (or private) you can only really do an educated guess. Ofc it's not free. But the point is that in the way you calculate, it can present as free. My question is to what extent do they calculate

tetris11 1y ago

Why is average still such a persistent metric though? Isn't median more representative of an individidual's actual purchasing power? If they paired average metrics with gini coefficient, I'd be happy

__mharrison__ 1y ago
What would be your recommended way to combine them? Or just show them separately?
- tetris11 1y ago
  show them separately - high mean, high Gini, and let the reader figure it out
dredmorbius 1y ago
NB: "average" can mean any of three measures of central tendency: the mean (sum/count), the median (middle value), or the mode (most frequently occurring value). All three may be valid choices in specific contexts. Whilst it's common to interpret "average" as "mean", this isn't strictly accurate or reliable. The Economist's article errs in failing to distinguish which measure of central tendency is actually meant by "average".

xnx 1y ago

Why measure "rich" at all and just go with life satisfaction surveys?

eastbound 1y ago
North Africa countries have very very low suicide rates for the same reason. Many factors can change your self-reporting of events you go through.
- spwa4 1y ago
  Morocco suicide rate: 7.2/100k Spain suicide rate: 8.4/100k Portugal suicide rate: 11.5/100k And seems to vary with the economic situation just like everywhere else. Plus quite a few North African countries ... well, they're just lying. Look at Egypt, even Tunisia ... these figures are just not possible, they're either misclassified or just lies.
dismalaf 1y ago
Because some cultures are "complaining" cultures, meaning they complain socially. Others will find fault with the tiniest thing, even if 99% of everything is perfect. And others can be incredibly content with very little. It gives absolutely no insight into how good life actually is anywhere.
Henchman21 1y ago
How about we measure how many are in poverty and try to push society to make that number zero everywhere?

NalNezumi 1y ago

Can someone more versed in macro economics clarify to me, to what extent "price differences between countries." goes? Like are we just comparing simple goods: grocery, white wares, cars, fuel/electricity etc the price of these things there. Or are we also considering things such as: need to save money for Healthcare, University, credit card transaction fee, housing cost (mortgage), required amount of fuel for basic functioning of everyday life? The latter is basically stuff that is either cheap or free in certain places while astronomically high in other (US, but I guess housing price is everywhere if city). I feel like layman AND economist doesn't truly account (or even understand) how different some countries have it on those metrics; A person in Tokyo or most capital cities in Europe can get away with ZERO fuel + car cost, while for Americans that's a death sentence. Same for Healthcare. So comparing those prices doesn't even make sense to begin with, but leaving it out is a major boost to places where salaries are high (US) but the (hidden) cost are not measured.

RestlessMind 1y ago
> The latter is basically stuff that is either cheap or free in certain places Healthcare is absolutely not free anywhere. It maybe that the costs are indirect via government taxation and benefits are curtailed via rationing or simply unavailability of certain types of care.
- NalNezumi 1y ago
  Sure. But that again depends on calculation? If we are talking about "disposable income" in the average statistic (after tax) then ofc anywhere that does it through tax will have lower purchasing power because it's (easy to be) included. While places where it's mostly out of your pocket (or private) you can only really do an educated guess. Ofc it's not free. But the point is that in the way you calculate, it can present as free. My question is to what extent do they calculate