Measuring GDP adjusted by purchasing power parity, but not per capita, seems like an odd metric.
PPP-adjusted GDP per-capita gives an indication of the level of goods/services affordable by an individual citizen. Total GDP, unadjusted, is an indicator of a country's economic power. What does PPP-adjusted total GDP indicate?
Yeah, take something proportional to how big (population) AND rich a country is. Divide this by a metric that grows with how rich a country is. This way poorer but bigger countries score better. But that doesn't tell much.
The US is a country with rich people in it, it’s not a rich country.
( I live in New Orleans, 35% of kids don’t have enough calories per days to have a proper brain development. And New Orleans is fine compared to the rest or Louisiana )
> in New Orleans, 35% of kids don’t have enough calories per days to have a proper brain development
Source? I find that hard to believe, considering how cheap and plentiful calories are and how numerous the various public assistance programs exist relating to feeding the poor.
I know it’s intense. Those people must be stupid. Or it’s their fault and they deserve it. ( :s ! )
My bad for the figure, I had a third in mind. It’s less. Can’t find a general population figure in the short amount of time. 20 ish % of black kids is enough or it’s fine ?
What was eye opening to me was volonteering in a random school. And noticing how the breakfast was a important and respected steps. Like.. not everyone had dinner last night.
Been to new orleans. Didn't see anyone with 'caloric deficit' issues.
And you have it backwards. Louisiana has a problem with an overabundance of calories, not a lack of calories. Louisiana is one of most obese states in the country after all.
Or “no kid hungry Louisiana”, that the one I noticed here. Giving breakfast out in school. My first reaction was to wonder why. Digging I realized that a fair amount of kids were coming to school on a empty belly.
That’s it.
Also “been to New Orleans” is a funny statement! Congratulations on seeing Jackson square and the French quarter. It’s a city, not 10 historical blocks.
I find it utterly bizarre that this kind of ignorant hand-wringing is so pervasive. The US median household income is ~6x the global median. The average US household in the bottom income quintile has an income above global median before accounting for 10s of thousands of dollars in in-kind transfers (i.e. welfare).
> 35% of kids don’t have enough calories per days to have a proper brain development.
The article says nothing about children lacking the calories required for brain development. It says 23% of black households self-reported "not having enough food in the past week". Which is weird, because when I go looking for objective data that might support the assertion that a significant percentage of the population isn't getting enough calories, I don't find anything. I did find an article that obtained weight data on both whites and blacks nationwide, and broke them down in Underweight, Normal, Overweight, and Obese categories... but the number of underweight individuals was so low that it rolled them into the 'Normal' category, and didn't even report the Underweight category. It's almost like everyone is getting more than enough to eat!
Neither your anecdata on "visible poverty" nor the US Gini index contradict the obvious fact that the USA is, by any serious measure, a rich country.
So everything is fine and my experience is anecdotal.
It truly makes me feel better.
I should do the same exercise you did with Swiss data.
That what come to my personal mind when I think of “rich country” not the lower 9th ward, or New Orleans East.
But since the US is rich like demonstrated.
I should actively start to reframe those place into “rich”. And look more at all those fat people in the street.
One area it can come up is the country's ability to self-supply things.
To take a example that is currently of interest, Russia's ability to manufacture weapons is far greater than that if a country with the same nominal GDP but is closer to its PPP GDP (plus the effects of being more self sufficient than most countries other than the big two).
I liked a russian hacker's story of building an IR camera by repurposing an old scanner: at one point he tries to source a detector from China but is unable to order it because of (he says) US export rules; then he remembers he's from a country that builds its own air-to-air missiles, and finds a Russian supplier who sends him the part...
I believe the rationale here is that if you can source some gadget from China, it's going to be ten times cheaper than any alternative, since there's an enormous stock of those there used to to make other gadgets, therefore low margins and high turnover.
Yep, maybe GDP is not a great measure if one country can produce a box of cookies for $1 while another $4. Turns out physical output is important (bushels of wheat, pounds of steel, # of cars, etc).
As we're seeing now, it's an even bigger problem when a country produces an advanced military gadget for $1 and the other country can't match it in terms of production for even $50.
> Measuring GDP adjusted by purchasing power parity, but not per capita, seems like an odd metric.
Depends on what you want to compare.
If you want to understand the "heft" of the country in terms of the sheer size of the economy (adjusted for exchange rates) then you do country GDP on PPP basis.
If you want to understand the size taking into account currency rates then you do plain GDP.
If you want to understand how well off a citizen is THEN you do per-capita GDP.
When countries play on the world stage for influence, their overall heft i.e. total GDP (whether on a PPP basis or not) is essentially the main determinant.
"Heft" is how much weight a country can throw around to affect other countries. Stuff like fighter jets & aircraft carriers, aid deals, trade deals, purchasing assets in other countries, et cetera. Most of that is in trade currency, so no PPP adjustment. Building fighter jets is cheaper in low-PPP countries, but only partially. So, no I don't think you should PPP adjust if you want to measure heft.
> Building fighter jets is cheaper in low-PPP countries, but only partially.
Even that holds only true if all other things are equal. But low PPP countries are strongly correlated with less industrialization, less educated workforce etc. That's why most (low-PPP) countries, even large ones, don't produce their own jets - it's cheaper to buy them.
> Most of that is in trade currency, so no PPP adjustment.
It's non-trivial to make that cut. I'd say things PPP for stuff like food doesn't count, but PPP for even rather basic industrial products already does.
PPP-adjusted total GDP indicates ability or capacity to work on commodity-industries industries, like construction, or furniture, where establishing new industries doesn't need as much new research.
PPP-adjusted GDP is an indicator of the level of goods/services affordable by all citizens together.
The treemap shows how global total purchasing power is divided between countries.
A treemap of GDP PPP per capita would show the breakdown of purchasing power if you put one citizen of each country in a single room. I think a bar chart would be a better choice in that case.
If you plot the US' nominal GDP over time in terms of USD, it looks pretty smooth, while other countries bounce around a lot more.[0] That's because other countries' USD nominal GDPs are affected by exchange-rate fluctuations.
If you plot in terms of PPP GDP, other counties suddenly appear much smoother.[1]
Refrigerators and automobiles usually cost the same. Rich countries may be buying fancier ones, while mid-tier countries may sometimes have significant tariffs on cars.
But eating out, getting education, child care costs and foremost real estate, are all deeply PPP corrected.
Purchasing power only makes sense on a per-capita level; it measures on average what you can by with the sorts of money you can carry. The price will not be the same if the entire country's GDP tried to buy the same goods.
It can also reflect the dynamical nature of the economy in commodities-related industries. A country with higher total purchasing power has higher ability to start and finish projects in low-tech industries like home construction, furniture manufacture and so on.
I'm from china. I don't think our country has already exceed USA in economics.Acturally most chinese believe we fall behind USA and Europe coutries far way.
China is still far behind the US on a per-capita basis, but China has a lot of people, so the overall size of the economy is similar (larger in PPP terms, smaller in nominal terms).
I don't think anyone here believes China is ahead in terms of average standard of living. This graphic is just about the overall size of the economy.
Maybe more useful if hierarchical relationships exist but I just love treemaps in general. I love the way they can make the most of that given screen space. A bar chart would not be able to fit in that screen area because there has to be empty space in a bar chart.
imo PPP is misleading. 1 public toilet in the US is nothing like 1 public toilet elsewhere. 1 housing unit in the US is nothing like 1 housing unit in China. Nominal GDPs in USD fluctuate in value because they are real. Countries in EU, Russia or China are suddenly relatively less wealthy after adverse currency move.
Nominal GDP is a good indicator of quality of consumption whereas GDP PPP is a better indicator for potential of production. If the US worker is used to a home with a lawn, he will still be undercut by a Chinese worker who lives in a 25-storey apartment.
In case of adverse currency move, EU, Russia and China may still produce as much stuff (taken together they produce all of the components, whose effective price unchanged), but their US competitors are all undercut on price. They'll consume a bit less for the duration, though.
It all depends on how it's produced in China and also what's the marketing and the price positioning. It probably can get away with higher price by positioning itself as an exotic brand.
You could ask the same for North Korea, is a Big Mac really the same product over there than in Alabama ?
Let's agree to disagree even for that specific Big Mac. I think the likelihood of contamination/ food fraud, concealed scandals, etc is higher in China and NK. Simply knowing it prevents me from similarly valuing the Big Mac. In addition, I often enjoy freely joking about the stupidity of local politicians while eating... and could bring up the building standards, codes, AC, open restrooms, reliability of power grid, etc that won't match US standards and impact my experience as a customer. Anecdotal example 1: In July 2014, Shanghai Husi, a Chinese subsidiary of a US-owned food supplier was caught producing substandard meat products. McDonald's was one of its biggest fast-food clients and had been sourcing from the supplier for more than two decades. After cutting ties with Shanghai Husi, McDonald's China and its branches in Hong Kong and Japan were forced to pull many products from the menu due to a severe shortage of meat and vegetable supplies. Just 1 occurrence of them getting caught, imo more likely to occur in countries with widespread corruption and directly impacting the burger consumption experience/consumer peace of mind. Anecdotal example 2: when I eat I like to connect to wifi and freely browse YouTube
The point isn't wether the product is exactly the same. It's wether it's intrinsically worth the same.
You could be paying thousands of dollars to get your Big Mac in PyongYang, so technically it's available there, and PyongYand residents can there be declared as crazy rich on the PPP scale.
Same way if the measure was Toppogi it would be dirt cheap in PyongYang and Seoul but crazy expensive in Guatemala with one single shop offering it as a delicacy.
For the technically inclined, I did this treemap with the open source D3.js (https://d3js.org/d3-hierarchy/treemap) JavaScript library. Great library btw!
Total production / activity of the world - yes it makes sense. Just as it often makes sense to look at real gdp growth (growth adjusted for inflation) rather than nominal gdp growth.
Yes, more like regions, I stuck to the definition of the World Factbook, where I got my data from. Green for example is Africa, blue Europe, red Asia, but there is also "Middle East", "North America", "South America" and "Southeast Asia", "Oceania".
Based on my personal experience with delayed replies to Indian business letters, the inflation from hyper polite to enraged in one exchange is going to be hilarious if it gets out more widely.
PPP-adjusted GDP per-capita gives an indication of the level of goods/services affordable by an individual citizen. Total GDP, unadjusted, is an indicator of a country's economic power. What does PPP-adjusted total GDP indicate?
( I live in New Orleans, 35% of kids don’t have enough calories per days to have a proper brain development. And New Orleans is fine compared to the rest or Louisiana )
Source? I find that hard to believe, considering how cheap and plentiful calories are and how numerous the various public assistance programs exist relating to feeding the poor.
My bad for the figure, I had a third in mind. It’s less. Can’t find a general population figure in the short amount of time. 20 ish % of black kids is enough or it’s fine ?
Source :
https://www.cpex.org/blog/stateofhunger
What was eye opening to me was volonteering in a random school. And noticing how the breakfast was a important and respected steps. Like.. not everyone had dinner last night.
Oh well, right ?
And you have it backwards. Louisiana has a problem with an overabundance of calories, not a lack of calories. Louisiana is one of most obese states in the country after all.
https://www.cdc.gov/obesity/data/prevalence-maps.html
There are legitimate issues with economic disparity in the country. Not sure why you are trying to tie it to calories?
Looking up what I had in mind the proper way to reference it is “food insecurity”
Source :
https://www.cpex.org/blog/stateofhunger
Or “no kid hungry Louisiana”, that the one I noticed here. Giving breakfast out in school. My first reaction was to wonder why. Digging I realized that a fair amount of kids were coming to school on a empty belly.
That’s it.
Also “been to New Orleans” is a funny statement! Congratulations on seeing Jackson square and the French quarter. It’s a city, not 10 historical blocks.
> 35% of kids don’t have enough calories per days to have a proper brain development.
Utter nonsense.
Yet, I never seen that much poverty before moving here. I guess it’s just more visible.
Gini index would be a good addition to your figures.
Regarding a third of kids being hungry on a regular basis. I had it wrong indeed. It’s more 20% of black kids. Wee!
Source : https://www.cpex.org/blog/stateofhunger
Neither your anecdata on "visible poverty" nor the US Gini index contradict the obvious fact that the USA is, by any serious measure, a rich country.
It truly makes me feel better.
I should do the same exercise you did with Swiss data. That what come to my personal mind when I think of “rich country” not the lower 9th ward, or New Orleans East.
But since the US is rich like demonstrated.
I should actively start to reframe those place into “rich”. And look more at all those fat people in the street.
To take a example that is currently of interest, Russia's ability to manufacture weapons is far greater than that if a country with the same nominal GDP but is closer to its PPP GDP (plus the effects of being more self sufficient than most countries other than the big two).
So that's where you look first.
That's why difference exists in the first place - because of power imbalance driven by different levels of technological progress.
I agree. As I commented recently here, we should also normalize by total hours worked. People in the US work much more than in many other countries.
I guess one use of total GDP adj. b. PPP would be when countries negotiate something. Then, China would have a strong argument for setting terms.
Depends on what you want to compare.
If you want to understand the "heft" of the country in terms of the sheer size of the economy (adjusted for exchange rates) then you do country GDP on PPP basis.
If you want to understand the size taking into account currency rates then you do plain GDP.
If you want to understand how well off a citizen is THEN you do per-capita GDP.
When countries play on the world stage for influence, their overall heft i.e. total GDP (whether on a PPP basis or not) is essentially the main determinant.
Even that holds only true if all other things are equal. But low PPP countries are strongly correlated with less industrialization, less educated workforce etc. That's why most (low-PPP) countries, even large ones, don't produce their own jets - it's cheaper to buy them.
> Most of that is in trade currency, so no PPP adjustment.
It's non-trivial to make that cut. I'd say things PPP for stuff like food doesn't count, but PPP for even rather basic industrial products already does.
The treemap shows how global total purchasing power is divided between countries.
A treemap of GDP PPP per capita would show the breakdown of purchasing power if you put one citizen of each country in a single room. I think a bar chart would be a better choice in that case.
If you plot in terms of PPP GDP, other counties suddenly appear much smoother.[1]
0. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location...
1. https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat...
But eating out, getting education, child care costs and foremost real estate, are all deeply PPP corrected.
Assuming India as a Commonwealth country counts in Oceania, that leaves Indonesia as the largest "Disputed Territories" member on this graph...
I don't think anyone here believes China is ahead in terms of average standard of living. This graphic is just about the overall size of the economy.
In case of adverse currency move, EU, Russia and China may still produce as much stuff (taken together they produce all of the components, whose effective price unchanged), but their US competitors are all undercut on price. They'll consume a bit less for the duration, though.
It all depends on how it's produced in China and also what's the marketing and the price positioning. It probably can get away with higher price by positioning itself as an exotic brand.
You could ask the same for North Korea, is a Big Mac really the same product over there than in Alabama ?
You could be paying thousands of dollars to get your Big Mac in PyongYang, so technically it's available there, and PyongYand residents can there be declared as crazy rich on the PPP scale.
Same way if the measure was Toppogi it would be dirt cheap in PyongYang and Seoul but crazy expensive in Guatemala with one single shop offering it as a delicacy.
I wonder how they come up with a common ground between Kuwait and Mexico, it feels incredibly easy to manipulate from the source.