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It also ignores quality of the goods. But more importantly, it ignores what you can do with the extra hours you work.. same as with PPP it ignores that an iPho
by jopsen 1y ago
It also ignores quality of the goods.
But more importantly, it ignores what you can do with the extra hours you work.. same as with PPP it ignores that an iPhone isn't cheaper (it may not be a basic necessity), but many globally traded goods that go beyond basic needs aren't affected by PPP.
- mickeymounds 1y agoScope note: This index is a floor affordability ratio for non-tradables (rent, utilities, basic food, transit). It doesn’t rate product quality or luxury/tradable goods. Quality: True—quality varies. We use a fixed, minimal basket to avoid hedonic debates; I can add sensitivity bands by quality/spec. “What extra hours buy”: Good point. We’ll add Discretionary Hours = paid hours/month − hours to essentials to show room for non-essentials, saving, leisure. iPhone / tradables: Different lens. Many tradables price similarly across countries; essentials are mostly local/non-tradable and drive this metric. We can add a companion “tradables-hours” (e.g., hours to buy an iPhone/streaming bundle). Takeaway: Essentials-hours ≠ welfare. It’s one clean piece—time to cover basics—best paired with discretionary and tradables views.
- jopsen 1y agoDon't get me wrong I think these metrics are interesting. But not useful for comparing Bolivia and Sweden. But comparing nordic countries this way makes a bit sense. Comparing emerging economies this way might also make some sense. But there is always lots of welfare not covered in these metrics.