Mississipi is richer than Europe | Hacker News Reader

Mississipi is richer than Europe

mjperry.blogspot.com

14 pointsAnon8451 comments

Lies, Damned Lies, and Statistics.

Of course, I would bet that median per capita income, or median household income, is substantially lower in Mississippi than in most of the EU15 (The first 15 members). Median household income in Mississippi is ~$29K.

see http://crookedtimber.org/2005/06/03/its-the-median-stupid/ for some discussion of this topic

Also, I would bet that the deprivation index for Mississippi [1] would be higher than for most of the countries he cites, especially for the lowest quartiles.

[1] Deprivation index: add up the number of these you can't afford. Adequate home heating, an annual holiday, new furniture to replace worn-out items, a meal with meat every second day, new clothes, the wherewithal to entertain guests at home.

The worst off of the countries he cites, Italy[2], has a top quartile deprivation index of 0.5, median quartiles of ~0.6-0.7 (estimating from chart0 and bottom quartile of 2.0. I doubt that Mississippians are better off than that.

[2] See http://www.eurofound.europa.eu/pubdocs/2008/52/en/1/EF0852EN...

Does PPP take into account things that are paid for with taxes (to a greater degree) in the EU and by insurance fees in the US, e.g. healthcare?

Uhh . . . Do you guys know how PPP is calculated?

Using PPP the people of Mississippi are more wealthy than the people of Nebraska, New Mexico, Delaware, New Hampshire, Hawaii, West Virginia, Idaho, Maine, Rhode Island, Alaska, South Dakota, Montana, Wyoming, North Dakota and Vermont.

In fact, they are more wealthy than the people of Hawaii and Vermont COMBINED!!!

Another one an econ professor loves to throw at his students.

You ready?

The people of Gary, Indiana are far better off than the people of Darien, Connecticut!

If you are not American, you probably don't have a good appreciation for the absurdity of the previous assertions. So think of it this way, using PPP, the people of Lagos, Nigeria are LOADS better off than the people of Singapore. This is as close as I can find to the international equivalent of a comparison of Gary, Indiana, and Darien, Connecticut. If any Americans out there can come up with some better ones do jump in! PPP comparisons reach quite humorous conclusions at times. I'm sure we are all up for a good laugh.

Neat. Why does it work this way?

I wonder if it's due to income skew. If there's a bunch of people at the bottom of the pyramid, providing services cheaply but getting paid very little, it makes everyone else seem far better off.

Exactly. PPP is calculated in such a way that makes such gigantic jokes like this possible. You simply have to travel to see how funny it is. Has that person been to Mississippi, and has he been to Switzerland or Norway? I mean, come on.

I was waiting for someone to debunk this, but I have to ask --- everyone in Jackson has a Wal-Mart within a 5 minute drive, and the average home purchase price is $129,000. It isn't possible that people in Jackson have approximately the same standard of living as Germans, at a much lower price?

Let's not blithely discount the judgment of all the people who pay twice as much for the same house elsewhere.

There's a reason that people pay 3-4x as much to live in Manhattan, but it isn't to get better houses. Just 43% of Germans own at all. Renting can be better than owning, especially in major metro areas, but owning comes with benefits too --- like being able to customize.

Yes, there are many factors to consider. For instance, the average European probably enjoys much better weather than the average Mississippian.

Of all the European countries I've been to, Germany is the country that most reminded me of the US in terms of road patterns and layout, car orientation, big marts / malls with a lot of choice - far more choice than the average UK supermarket, in which it's unusual to see more than about 4 choices for any given commodity.

For context, I'm Irish and currently living in the UK, working for a US company and regularly visit the Santa Cruz area; I've been in Paris, Barcelona, Seville, Lisbon, Sicily, much of Italy, Amsterdam, Vienna, Prague, Bucharest, Budapest, Sofia, Athens, Lausanne, etc. I know my German girlfriend and her friends disagree with my perception - they see UK & Ireland as being quite different from the continent.

I guess that depends on what you mean by "standard of living".

I can give you a triple gold plated guarantee, though, that the Germans would not consider living in Jackson in your $129k house next to Wal-Mart a "high standard of living".

So, in summary, no, it's not possible. You should travel a bit. The whole idea is a complete joke. I mean seriously, would you rather live in Berlin or Jackson? Seriously? Berlin has a 24hr tram every 15 minutes, go whereever you like for like a euro. Some of the best nightclubs in Europe (America has 0 good nightclubs). What was that about cheap jars of pickles at Wal-Mart?

I guess that depends on what you mean by "standard of living".

Exactly! I, for example, wouldn't want to live in Germany as you describe it. I could care less about trams and nightclubs -- my idea of a great night out is lying in the grass in the dark with my wife, sharing a bottle of wine while listening to the howl of coyotes in the distance. But I prefer to live in a rural area; someone with more urban sensibilities would probably think I'm nuts!!

I've traveled a lot, including to Germany. My wife lived in Zurich. Please don't assume I'm being parochial.

You and I are not the right control group for this experiment. I'm not going to move to Jackson because my favorite bands will never play there, and because I like high-end and ethnic restaurants. But a 44-year-old schoolteacher might not care about those things. The decision between Jackson and Chicago might not be cut-and-dry for him.

(Also, have you been to Jackson? I have. It's not squalid. It's not hickish. It's just a small city. It has several large colleges, and is the headquarters for a couple large companies.)

Oh, I didn't mean that. I just meant that "how much stuff you can buy" is perhaps not the only possible measurement of quality of life. And I've long thought PPP to be almost irrelevant in developed countries. Every single thing I buy I buy on quality, not price or quantity. PPP utterly fails to account for that. It's useless.

Anyway. Cool, I like Zurich. Hm, this thread is making me remember all these cities and influencing my holiday plans!

update: you edited your post. I have never been to Jackson, nor any American city aside from NYC and the California sprawl (LA/SF/SD). Yes, your 44-yr-old schoolteacher might enjoy a happy, quiet life there. I am sure it is a fine city, but I have zero interest in ever visiting it. Again, you are right - we are not the right control group here.

Not sure I totally buy this argument. Housing, food, and transportation are three things that vary wildly in price around the world, and which you can't buy strictly on quality. For instance, whatever else you might want to say about Jackson, you can get a better house there than you can get in NYC metro.

(edits: look me up if you ever make it to Chicago, which is a cooler place to visit than LA, and also note that SF is not in the same sprawl as LA and SD. =P)

But people don't just buy houses, they buy lifestyles and locations in which they live. The actual physical house might be better but who cares?

Your average NYC dweller probably wouldn't even live in Jackson if the rent was totally free. The physical quality of the house's construction, etc, is almost totally irrelevant.

Your arguments are tending to sound more emotional than rational. NYC has a huge underclass, perhaps most of which would happily take a house in Jackson if they could get a secure job there and move without totally disrupting their lives. NYC is, for instance, a really bad place to raise a family on the national median income, or to start a company on same.

The point made upthread was that no German would consider a life in Jackson equivalent to the life they could have in Germany. That's true, but it's probably mostly true because most people in Jackson don't speak German or eat the same food. And the converse is also true; someone from Jackson would probably find Berlin cramped and invasive. That's why you have to control for cultural stuff.

(This post is now getting lots of debunking comments that I think are more sound than "it's ridiculous to even compare the two because Germans would scoff at Jackson").

What could an American nightclub copy from Europe to give our continent its first 'good' nightclub?

But but but a coffee and cake at a Swiss Starbucks will cost you so much more! At least that's the way it was when I was last in Lausanne, but the views and free wifi (city-wide IIRC, judging by the SSID) made up for it.

Lausanne!? That's practically in France!

edit: well it is!

On the face of it, this comparison seems pretty absurd. I haven't been to Mississippi, but I have been to many European countries, and can attest that Germany is pretty rich on the face of it, personal incomes aside. I wonder how such comparisons value public goods, and how well their basket of goods (for PPP weighting) is balanced.

Well, where in Germany have you spent serious time?

Roughly in order of time spent, Neumünster, Bochum, Frankfurt am Main / Mainz, Hamburg and Berlin. I've never lived there, but my GF is German, and have been to and fro for weddings, meet parents, various trips etc.

I should hasten to add that this isn't an exhaustive list, I've been on a number of train trips too, but I wouldn't count the handful of hours in those places, e.g. Lübeck, Kiel, Flensburg.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin...

PPP is a very inaccurate measure of quality of life and cost of living. Countries with a bigger income inequality leads to far higher cost of living and much poorer quality of life. So suggesting that having a high PPP is good when the US on the Gini indices (which measure income inequality) rates a 45 and the EU rates a 31 is seriously screwed up and seriously misleading.

http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_Hum...

Ignorance goes a long way, and Americans (both through blogs and the American media) repeatedly release BS like this, claiming the US is 'better' than Europe for an endless list of reasons. There was one of these racial BS things posted a few weeks about how Europe was worse off than the US because it doesn't have Wal-Mart. Ironically the UK does have Wal-Mart and it's being beaten by Tesco, and Tesco since 2007 has opened stores in the UK to directly compete with the US. Carrefour is the largest supermarket retailer in the world and far out beats the US in terms of hypermarket square footage. Two of the Big Three Supermarket chains are from Europe (Carrefour and Tesco). France also has a huge established systems of Cooperatives that far pre-date the founding of Wal-Mart and who have had hypermarkets long before Wal-Mart even owned a store overseas.

The promotion of these articles repeatedly is showing a very disturbing trend in the US posters on HN. I'm unsure if this is a reflection of the US as a whole or not, but it appears to me to be a strong effort by Americans to say "well it was already worse elsewhere, so it's not so bad here" to the economic recession. I find it worrying.

Wal-Mart was also in Germany but they didn't last long for whatever reasons and sold their stores to Aldi or Lidl I think.

Someone forgot to put all the EU countries that have higher PPP than Mississippi like Ireland, Denmark, Austria, Luxembourg, Sweden, Belgium, Finland. Luxembourg a PPP of $~80k which is more than DC which is on top of the US list with its $65k.

Better read this: http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_per_...

and this: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP...

and make your own conclusions.

PPP is bunk. It assumes that currency traders are morons who market trades are unable to correctly value a currency. Why not compare the US to Europe using the market values of the currencies? If you do that, then you realize Mississippi is poorer than any European country. You also realize that all of the US is poorer than several European countries.

One thing to remember is that a country where one person makes $120,000 and nine others make $20,000 has the same per-capita GDP as a country where ten people make $30,000 each. Also, as m_eiman points out, PPP does not account for social costs such as increased greenhouse emissions or declining infrastructure.

It's not obvious to me that the infrastructure in Mississipi would be declining faster than the infrastructure in, say, Italy. At the very least, Mississipi is bound to have a much better road system.

Italy's roads aren't that bad, actually (at least in the north). The problem is that they are covered with Italian drivers, and there are an awful lot of them: 60 million in an area a bit smaller than California. (Well, 60 million inhabitants - not all of them drive, but more drive than they ought to)

I wasn't trying to imply that Italy's roads were bad, just pointing out that US roads are unusually excellent. I picked Italy instead of Germany to avoid a pointless message board argument comparing Germany's often-excellent roads to Mississipi's.

People (and by that I mean Americans, sorry) seem to think Germany's roads are an exception. While this may have been true 20 or 30 years ago, in reality they're pretty much the same as or even a little worse than the rest of Europe. An exception might be the EU10, but they're catching up really fast.

Also, 20-lane motorways through the centre of a city is not a sign of excellency but rather that of poor planning.

> Mississipi is bound to have a much better road system

Which brings us to "increasing greenhouse gas emissions". Also, there's rather more to both infrastructure and living standard than the number, size and quality of roads.

I'm not sure what your point is. Mississipi has many, many problems, but smog isn't one of them.

I'm not sure what your point is. Greenhouse gas emissions (chiefly carbon dioxide and methane) don't cause smog (caused by ground level ozone and nitrogen oxides).

Edit 2 Moved reply into reply.

Fine, Ryan. s/smog/air quality. The air quality in Jackson is not detectably poorer than that in most of Germany.

Greenhouse gas emissions are not smog, and they're not air pollution in the normal sense of hurting people in their immediate vicinity.

Greenhouse gas emissions contribute to global climate change, and the per capita GHG emissions of Mississippians are more than twice as high as the per capita GHG emissions of Europeans, regardless of the local air quality.

Also, that was only one part of my comment. The other part is that most Europeans enjoy all kinds of public infrastructure intricately related to living standards that Mississippians do not. The US has decided that impeccable road infrastructure is the sine qua non of public nonmilitary expenditure, but there is an enormous opportunity cost tied into a national land use and transportation model based on ubiquitous motoring and related low densities.

See, for example:

* http://www.newsweek.com/id/76929

* http://www.theatlantic.com/doc/200803/subprime

Total car dependence plus industrial food and big box retail minus actual neighbourhoods, family farming or even gardening equals an ecological and public health disaster in slow motion.

Yes, but the discussion was about whether Mississippi pays higher social costs than Europe. This has nothing to do with how much C02 Mississippi itself releases.

GHG emissions are an economic externality so vast that they're driving the planet's climate into crisis. Sooner or later those costs will be internalized one way or another. In the meantime, the cost of living in places like Mississippi that have extremely high per capita emissions benefits from a huge artificial subsidy that isn't being taken into account.

tptaceck writes: "But a 44-year-old schoolteacher might not care about those things."

That is the problem with PPP - it depends on making hundreds of such subjective valuations, all of which defy the actual market value of the currencies of the various countries. Why not simply compare the standard-of-living of 2 countries using the fair market value of the currencies?

I think such an honest approach is unpopular in the US because such an approach shows how much the US has declined over the last 40 years, relative to other nations.

This is probably accurate. If I want to make money I go to the US. If I don't want to have concerns over money I go to Europe.

When did HN become a forum for country dickwaving?

What a weird response. It is, to say the least, counterintuitive that, when PPP-adjusted, Mississipeans have greater buying power than Germans. It either suggests that something is wrong with the author's naive methodology of ranking countries, or that something weird is going on in Germany.

I think it's easy for Americans -- especially the educated and cosmopolitan-minded -- to idealize other countries.

Speaking as one, we're most likely to see their wealthy, urban, tourist-friendly areas. We're most likely to interact with foreign elites who travel here or work in international businesses.

We only pay their internal higher prices -- from their smaller and often more-oligopolistic domestic markets, and higher taxes -- on brief trips where we are price-insensitive, as tourists or corporate travelers.

That most people in admirable, 'rich', developed countries live simple, frugal lives -- by American standards -- can thus be surprising, even though it shouldn't be.

Some of us Americans live in foreign countries and are well past idealizing them, but take them for what they are; both things that are, in our opinions, way better than the US, or much worse.

It's a complicated enough matter that I could talk about it all night over a bottle of wine. Suffice it to say, however, that "Mississippi is richer than Europe" is stupid flame-bait. It's more or less on the level of snotty Europeans who think Americans are dumb. Couldn't we leave silly pissing matches like that to other sites? Pretty please?

The same statement can be flame-bait or a spark for thoughtful discussion, depending on the presentation and participants.

Stated without nationalistic puffery, "According to a respected economic measure (purchasing-power parity), Mississippi produces more, per-capita, than almost any country in Europe", among the right audience, is a very interesting thing to talk about.

Let's choose to see it as an invitation to subtle discussion among respectful participants, rather than patriotic pissing.

I thought it was a pretty rational response if you're not interested in seeing this site filled with flame-bait like this.

Hm, the problem with PPP is that it's very unclear what it's measuring. Someone with a wal-mart nearby has a higher "PPP" than someone without it. Definitely Americans have access to a lot of cheap crap; it would not surprise me if an average income earner in the Mississippi could indeed buy more random junk each year than your average German.

Purchasing power and quality of life, though, are two very different things. The idea that your average "Mississipean" has a higher quality of life than your average German is laughable. Intuitively, I would have thought Germany was higher overall than the USA, quite a lot higher.

So, if that's true --- and I live in a major US metro, I'm not a Mississipi booster --- you should be able to provide some metric justifying it. What about Germany makes it better than Jackson?

(in response to the earlier comment that was "when did HN become a forum for politics" prior to edit - though I think this still applies) I'd agree that topics like this clearly straddle the line but they're also of interest to at least some of us - especially given the underlying question of what policies help/hurt us and create wealth? Some politics are unavoidable given their impact on startups.

It's also a pretty interesting factoid especially in the aftermath of the financial crisis that provides a bit of perspective where nearly every country is doing some introspective as to how it happened and when at least the US is about to adopt some policies that you could call European.

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