Isn't PPP per capita a better measure of quality of life than nominal GDP per capita? I care about what I can buy.
Obviously, nominal GDP per capita matters for international vacations.
Obviously, nominal GDP per capita matters for international vacations.
It doesn’t know how much money you have, it doesn’t measure the purchasing power of individuals. It also is based on a basket of 3000 fungible goods and services without accounting for value of quality or outcomes; as explained already in this thread.
It doesn’t take into account median income, income and wealth inequality, unemployment rates or any other factor that probably matters more than how much a bag of potatoes or a new highway costs.
Bulgaria has a worse GDP PPP per capita than Russia and many other far worse places. Guyana has a better GDP PPP per capita than France or Canada.
Greece’s GDP PPP per capita and in general is now higher than its pre-2008 crash, its nominal GDP however is still nearly half of what it was.
Youth unemployment is nearly at 40% with overall unemployment at 10-11% which is still masked by the fact that many people were still able to retire early over the past decade as they were still eligible for the 60 year retirement age (and earlier for certain occupations).
None of these factors alone can be used to extrapolate how well people are doing it take far more in-depth and even somewhat subjective analysis.
For example Norways GDP PPP per capita is about 30% higher than that of Finland however the average Norwegian is probably not better off than the average Finn especially not by “30%”.
Using GDP PPP per capita or otherwise as a rebuttal for economic stagnation due to lack of GDP growth is disingenuous at best and dangerous at worse.
No per-capita metric does this. You have to use things like the median wage to capture the purchasing power of individuals. For example, Equatorial Guinea's GDP/c is among the highest in Africa, but due to insanely high inequality and oppression, people are better off in Senegal or Rwanda. Guyana, which recently discovered large oil reserves, is a less extreme example of the same thing.
I swear I don’t remember the last time I’ve seen this low level of topical knowledge in a post on HN as this one.
Whether it's better to take the median income or the per capita GDP (which is closer to the mean income) to represent the "typical" person is a different question.
Countries like Ireland and Singapore have per capita GDPs that are 10-30% higher than the US, yet median wages are lower.
Wikipedia even has section explaining why:
Many of the leading GDP-per-capita (nominal) jurisdictions are tax havens whose economic data is artificially inflated by tax-driven corporate accounting entries.
Given that, PPP is better than nominal, however you compute the average.
No.
GDP isn't distributed evenly. PPP doesn't effect the distribution. It's just an adjustment.
An oil state like Russia has a decent GDP, but the distribution is horrendous. It doesn't matter if you look at GDP or GDP PPP. Neither gives you a great picture "what you can buy" unless you're in the top 1%.