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by adventured 1524 days ago
GDP PPP per capita is an extraordinarily low quality metric.

You end up with absurd examples where Botswana is comparable to China; Russia is comparable to Greece; Puerto Rico is comparable to Spain, ahead of Portugal, and just a bit lower than Japan; Kazakhstan is just a bit behind Latvia and Slovakia; Taiwan is far ahead of Finland, France, UK, New Zealand.
2 comments
Retric 1524 days ago
It’s just a question of what you’re trying to use these numbers for.

Imputed rent for example is one of those things that’s kind of silly on the face of it but makes various comparisons more reasonable. On the other hand it can also imply a great deal of economic activity that isn’t actually happening.

PPP is the same sort of calculation. If rents crash because a great deal of housing was built it can make GDP comparisons kind of meaningless. The country has more tangible wealth, people are better off, yet GDP falls. That’s not what you want the number to represent.

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csomar 1523 days ago
Both Nominal and PPP are out of whack if you are looking to learn about conditions on the ground. GDP measures the production of a certain country (and it's a very bad metric at that). Some countries are wealthy because its people make money from foreign sources. This is usually displayed by a high and chronic trade deficit.

That means you can have two countries with comparable GDP per-capita, where one of them have a more affluent population and able to pay higher prices.

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