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No need to apologize. I agree the PPP basket weights is a problem without a perfect solution but I has been studied extensively. My understanding is that most e

by spikels 13y ago

No need to apologize. I agree the PPP basket weights is a problem without a perfect solution but I has been studied extensively. My understanding is that most experts don't think it is a huge problem. I think most people would agree that Denmark is more expensive that the US but we can certainly argue about how much more expensive[1]. I'm not expert in the details of either GDP or PPP calculations but here is my understanding of how parental leave would be treated. It would show up in GDP because wages are included under the "income approach", one of the three main approaches used. I don't believe it would directly show up in PPP as it is not a good or service that people buy. I don't think is means anything to say parental leave is less or more expensive. Anyway I don't think it would have a big impact as there only about 50,000 births every year in Denmark in a population of 5.5 million. So if they max out the benefit it is only 25,000/5,500,000 = 0.45%. This is a good example why GDP and PPP work in practice - all these random errors tend to cancel out. If you are interested I suggest you read up on how GDP is calculated. The Wikipedia article if pretty good[2]. [1] http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=United+States&country2=Denmark http://www.numbeo.com/cost-of-living/compare_countries_resul... [2] http://en.wikipedia.org/wiki/Gross_domestic_product http://en.wikipedia.org/wiki/Gross_domestic_product

dalke 13y ago
Good point regarding the number of births, but I don't think the ratio is quite correct. The denominator should likely exclude those too young to work. There's about 1 million under 15 years old (and another 800,000 65 or older, who likely aren't working). How did 50,000 births turn to 25,000 in the numerator? There's 1 year of leave, so that's 50,000, no? I get 50,000/4,500,000 => 1.1% . Still relatively small, yes. I noticed a few things about the [1] you mentioned. It's mostly meant for 20-somethings. That is, it doesn't compare health care costs, daycare costs, etc. which older people and parents would be interested in. Also, there's a deliberate social policy behind why the Volkswagen Golf price is so high Denmark. Quoting from http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-is-rather.html http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-... : > this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents. For every kilometre driven by car, the Danish state pays out 16 cents. I've read through the GDP many times before. I still don't have a good grasp on it. It seems that having a poorly insulated house, for example, is better for the GDP because I need to work more in order to pay the higher heating bills. Or having more road damage because of automotive traffic is better because it means more government funding to rebuild the road system. Or it's better to use MS Windows than OpenBSD because the latter doesn't cost anything and so doesn't appear as part of the GDP. These are listed as 'externalities', but it's these externalities which contribute to happiness, enjoyment of life, etc. So while GDP per capita is used as an approximate measure for the ability to carry these out, it doesn't mean that it's actually being done.

by spikels 13y ago

dalke 13y ago

Good point regarding the number of births, but I don't think the ratio is quite correct. The denominator should likely exclude those too young to work. There's about 1 million under 15 years old (and another 800,000 65 or older, who likely aren't working). How did 50,000 births turn to 25,000 in the numerator? There's 1 year of leave, so that's 50,000, no? I get 50,000/4,500,000 => 1.1% . Still relatively small, yes. I noticed a few things about the [1] you mentioned. It's mostly meant for 20-somethings. That is, it doesn't compare health care costs, daycare costs, etc. which older people and parents would be interested in. Also, there's a deliberate social policy behind why the Volkswagen Golf price is so high Denmark. Quoting from http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-is-rather.html http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-... : > this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents. For every kilometre driven by car, the Danish state pays out 16 cents. I've read through the GDP many times before. I still don't have a good grasp on it. It seems that having a poorly insulated house, for example, is better for the GDP because I need to work more in order to pay the higher heating bills. Or having more road damage because of automotive traffic is better because it means more government funding to rebuild the road system. Or it's better to use MS Windows than OpenBSD because the latter doesn't cost anything and so doesn't appear as part of the GDP. These are listed as 'externalities', but it's these externalities which contribute to happiness, enjoyment of life, etc. So while GDP per capita is used as an approximate measure for the ability to carry these out, it doesn't mean that it's actually being done.