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The statistics are misleading and muddy: - Comparing adjusted disposable income between Scandinavia and the US is highly misleading. The disposable income in S

by pedrocr 17y ago

The statistics are misleading and muddy: - Comparing adjusted disposable income between Scandinavia and the US is highly misleading. The disposable income in Scandinavia doesn't need to cover any healthcare, education and other public services. I wonder how much, if any, the difference is once you adjust for that. - The argument mistakes distribution of wealth with average output per capita. Portugal is in the bottom of the list in the GDP per capita comparison between US states and EU countries. In Portugal there is a somewhat high wage disparity which means that those with high wages can afford to pay those with low wages to get cheap pizza (the example given). The same disparity exists in the US and pizza is cheap too, even though the US GDP per capita is at the other extreme of the comparison. Scandinavian countries have low wage disparity so things are more expensive by comparison. It has nothing to do with the output of the economy. Basically it is trying to draw conclusions about the strength of the economies based on statistics that don't properly control for very relevant factors. The only good argument is the 2.2% vs 3% GDP growth rates. Considering the article is from 2005, recent events may throw some doubt into that picture. The latest estimates on Wikipedia were 2.6% in Norway and 1.1% in the US.

chrischen 17y ago
Exactly. Watermelon cost like 50 cents in China, doesn't mean people are wealthier there. Although for some reason the iPhone costs several hundred dollars more... But I'm sure they'll come to their senses soon and lower it.
- wisty 17y ago
  Domestic goods are cheap, imports are expensive. Import taxes are lower in Hong Kong, but then service expensive.
  - chrischen 17y ago
    Domestic goods are cheap because the labor is cheap, and because the cost of living is lower. iPhones are expensive because China Unicom is stupid. Plus, iPhones are made in China, so they're not imported. And the irony is that the imported phones, which originated from China too, actually cost less.
- deleted 17y ago
  [deleted]
hop 17y ago
What's murky about purchasing power? Go live in Copenhagen - shits expensive! Plus a 25% sales tax on top and don't even get me started on alcohol...
- forensic 17y ago
  you're taking a middle class perspective poor people in the US can't afford pizza. poor people in scandinavia don't really exist.
  - hop 17y ago
    Lets not take it out of perspective - no one will starve here, this isn't Uganda, and Domino's has $5 Pizzas.
    - wisty 17y ago
      While poor people in Scandinavia (and drugs will ensure that some people are poor) can't afford $30 pizza.
      - michael_dorfman 17y ago
        In Scandinavia, drugs don't ensure that some people are poor. Some people choose to spend the $30 on drugs instead of pizza, of course-- but there really is no poverty here.
        Adam503 17y ago
        Let me ask again. Are you guys saying this video ABC report from Chicago about A food bank Chicago emptied of food is a lie? Do know that unemployment runs 70% among people with partial disabilities trying to find work? What do you think these perpetually unemployed partially disabled people are doing, living off their trust funds?
        michael_dorfman 17y ago
jjs 17y ago
> The disposable income in Scandinavia doesn't need to cover any healthcare, education and other public services. If the study's honest, those should already be factored into "cost of living", not "disposable income".
- pedrocr 17y ago
  The study that compares the US to Europe (linked in another commend) does these comparisons: - Compare GDP between US and Europe and show that US is higher per capita on average. No debate there. - Compare private consumption between the US and Europe, specifically stating that it does not control for healthcare and education. From page 14: Different countries’ choices of public commitment influence, through taxation policy, the scope available for private consumption, at the same time as high taxation countries, through their public sectors, offer some of the things recorded in low taxation countries as private consumption. There is no easy way of getting round this, but it is an important point to bear in mind when comparing private consumption. - It does then compare retail consumption which shouldn't include any of these things and thus be more objective. That one still shows the US as higher than Sweden. Another table shows that US households have more home appliances. So on that count Americans do appear to be richer, assuming of course they are getting equal average amounts of education and healthcare on their private purchases as the Europeans are getting on their tax dollars. Otherwise you'd just be displacing money from healthcare and education into buying retail goods. An argument can surely be bade that this is in fact the case and that although the higher end healthcare and education in the US is top notch the average over the whole population is not as good as the average in Sweden. Anyone know of any good data on this? I did notice however that the disposable income argument was made about countries within the EU based on another study. So it is possible that the public/private mix in the several EU nations actually doesn't favor Scandinavia in terms of efficiency. All these things are hard to argue because there is no comparable definition of the extent of public services in the economies and how those are replaced or not by private spending.
  - anamax 17y ago
    > So on that count Americans do appear to be richer, assuming of course they are getting equal average amounts of education and healthcare on their private purchases as the Europeans are getting on their tax dollars. That assumption is rather dodgy on a couple of points. One is that a lot of healthcare and education in the US is tax-supported. Another is that a rational person may choose to spend money on things other than healthcare and education. Forcing them to spend it on healthcare and education can make them poorer, aka "less bang for same bucks". > the average over the whole population is not as good as the average in Sweden. How about we compare average cancer survival rates? Relevant fact: a huge fraction of the "uninsured" in the US are eligible for free govt healthcare but simply haven't signed up. (When they run into problems, they typically, but not always, sign up.)
mnemonicsloth 17y ago
You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income.
- pedrocr 17y ago
  >You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? My first point was about disposable income which is a subset of GDP. My second one only said that high relative costs can just mean flat income structures independent of GDP (hence the two extreme cases of Portugal and the US with high and low GDPs both having low costs for pizza compared to Sweden. I never really argue that high GDP doesn't make you richer. > I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income. I agree with you that the pure GDP comparison makes the disposable income point less important. But GDP by itself doesn't seem comparable either. If the Scandinavian population consumes on average more healthcare and education on a per-service not per-dollar basis than the US one, you can have a higher purchasing power just because you buy a higher percentage of Chinese goods produced with low wage costs instead of locally supplied healthcare and education delivered by higher-earning local wages (ever increasing since you are getting richer). But now I am way out of my league. IANAEconomist All this discussion naturally forgets the next point of how much this added GDP/wealth actually drives happiness. From what I saw from Happiness research Europe has actually been obtaining gains in overall happiness while the US has stagnated. One theory was that productivity gains in Europe were used to reduce number of work hours while in the US they were used to increase GDP. Europe would be doing the better tradeoff as both were already at diminishing returns for money but time off had a good return. An interesting theory at least.

by pedrocr 17y ago

chrischen 17y ago

Exactly. Watermelon cost like 50 cents in China, doesn't mean people are wealthier there. Although for some reason the iPhone costs several hundred dollars more... But I'm sure they'll come to their senses soon and lower it.

wisty 17y ago
Domestic goods are cheap, imports are expensive. Import taxes are lower in Hong Kong, but then service expensive.
- chrischen 17y ago
  Domestic goods are cheap because the labor is cheap, and because the cost of living is lower. iPhones are expensive because China Unicom is stupid. Plus, iPhones are made in China, so they're not imported. And the irony is that the imported phones, which originated from China too, actually cost less.
deleted 17y ago
[deleted]

hop 17y ago

What's murky about purchasing power? Go live in Copenhagen - shits expensive! Plus a 25% sales tax on top and don't even get me started on alcohol...

forensic 17y ago
you're taking a middle class perspective poor people in the US can't afford pizza. poor people in scandinavia don't really exist.
- hop 17y ago
  Lets not take it out of perspective - no one will starve here, this isn't Uganda, and Domino's has $5 Pizzas.
  - wisty 17y ago
    While poor people in Scandinavia (and drugs will ensure that some people are poor) can't afford $30 pizza.
    - michael_dorfman 17y ago
      In Scandinavia, drugs don't ensure that some people are poor. Some people choose to spend the $30 on drugs instead of pizza, of course-- but there really is no poverty here.
      - Adam503 17y ago
        Let me ask again. Are you guys saying this video ABC report from Chicago about A food bank Chicago emptied of food is a lie? Do know that unemployment runs 70% among people with partial disabilities trying to find work? What do you think these perpetually unemployed partially disabled people are doing, living off their trust funds?
        michael_dorfman 17y ago

jjs 17y ago

> The disposable income in Scandinavia doesn't need to cover any healthcare, education and other public services. If the study's honest, those should already be factored into "cost of living", not "disposable income".

pedrocr 17y ago
The study that compares the US to Europe (linked in another commend) does these comparisons: - Compare GDP between US and Europe and show that US is higher per capita on average. No debate there. - Compare private consumption between the US and Europe, specifically stating that it does not control for healthcare and education. From page 14: Different countries’ choices of public commitment influence, through taxation policy, the scope available for private consumption, at the same time as high taxation countries, through their public sectors, offer some of the things recorded in low taxation countries as private consumption. There is no easy way of getting round this, but it is an important point to bear in mind when comparing private consumption. - It does then compare retail consumption which shouldn't include any of these things and thus be more objective. That one still shows the US as higher than Sweden. Another table shows that US households have more home appliances. So on that count Americans do appear to be richer, assuming of course they are getting equal average amounts of education and healthcare on their private purchases as the Europeans are getting on their tax dollars. Otherwise you'd just be displacing money from healthcare and education into buying retail goods. An argument can surely be bade that this is in fact the case and that although the higher end healthcare and education in the US is top notch the average over the whole population is not as good as the average in Sweden. Anyone know of any good data on this? I did notice however that the disposable income argument was made about countries within the EU based on another study. So it is possible that the public/private mix in the several EU nations actually doesn't favor Scandinavia in terms of efficiency. All these things are hard to argue because there is no comparable definition of the extent of public services in the economies and how those are replaced or not by private spending.
- anamax 17y ago
  > So on that count Americans do appear to be richer, assuming of course they are getting equal average amounts of education and healthcare on their private purchases as the Europeans are getting on their tax dollars. That assumption is rather dodgy on a couple of points. One is that a lot of healthcare and education in the US is tax-supported. Another is that a rational person may choose to spend money on things other than healthcare and education. Forcing them to spend it on healthcare and education can make them poorer, aka "less bang for same bucks". > the average over the whole population is not as good as the average in Sweden. How about we compare average cancer survival rates? Relevant fact: a huge fraction of the "uninsured" in the US are eligible for free govt healthcare but simply haven't signed up. (When they run into problems, they typically, but not always, sign up.)

mnemonicsloth 17y ago

You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income.

pedrocr 17y ago
>You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? My first point was about disposable income which is a subset of GDP. My second one only said that high relative costs can just mean flat income structures independent of GDP (hence the two extreme cases of Portugal and the US with high and low GDPs both having low costs for pizza compared to Sweden. I never really argue that high GDP doesn't make you richer. > I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income. I agree with you that the pure GDP comparison makes the disposable income point less important. But GDP by itself doesn't seem comparable either. If the Scandinavian population consumes on average more healthcare and education on a per-service not per-dollar basis than the US one, you can have a higher purchasing power just because you buy a higher percentage of Chinese goods produced with low wage costs instead of locally supplied healthcare and education delivered by higher-earning local wages (ever increasing since you are getting richer). But now I am way out of my league. IANAEconomist All this discussion naturally forgets the next point of how much this added GDP/wealth actually drives happiness. From what I saw from Happiness research Europe has actually been obtaining gains in overall happiness while the US has stagnated. One theory was that productivity gains in Europe were used to reduce number of work hours while in the US they were used to increase GDP. Europe would be doing the better tradeoff as both were already at diminishing returns for money but time off had a good return. An interesting theory at least.