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Idk why people keep using PPP when it's utterly meaningless.
Because people want to use a GDP numbers that does not fluctuate based on currency movements and take into account cost of living. There is reason international comparisons are using PPP numbers.
For instance here is Russia GDP per capita nominal. If these numbers represented living standard it would be one of the worst recessions in the world. But it was not one of the worst recessions in the world, it mainly dropped because the currency dropped.
GDP per capita nominal IMF Russia
2013: 14,818
2014: 12,925
2015: 8,447
2016: 8,929
2017: 10,248
2018: 10,955
2019: 11,162
I remember that the main reason you want to use nominal numbers is because you think Taiwan GDP per capita is too high compared to wages. I agree with that point, but pointed out the main cause of the problem is not the PPP adjustment but the nominal GDP being too high. Taiwan is a very cheap country, especially outside of Taipei, so it makes sense that PPP push Taiwan GDP up. But the wages are very low and do not fit a $25000 nominal GDP. Anyway, lets take a look at your country.
GDP per capita nominal Taiwan 1985: $3300
1997: $14000
2003: $13000
2011: $21000
Do you believe Taiwanese living standards 4 doubled from 1985 to 1997, then decreased from 1997 to 2003 and then increased by 60% to 2011?
I remember that the main reason you want to use nominal numbers is because you think Taiwan GDP per capita is too high compared to wages. I agree with that point, but pointed out the main cause of the problem is not the PPP adjustment but the nominal GDP being too high. Taiwan is a very cheap country, especially outside of Taipei, so it makes sense that PPP push Taiwan GDP up. But the wages are very low and do not fit a $25000 nominal GDP. Anyway, lets take a look at your country.
GDP per capita nominal Taiwan 1985: $3300
1997: $14000
2003: $13000
2011: $21000
Do you believe Taiwanese living standards 4 doubled from 1985 to 1997, then decreased from 1997 to 2003 and then increased by 60% to 2011?
No. No country's nominal GDP fits the wages. Most European countries' average salary is around 2000 euro. And Taiwan's wages are pretty close to nominal GDP, maybe a bit lower, but not outrageously inaccurate, which are still low because the nominal GDP is low. Numbeo is trash. If you reference a crowd-sourced website as your source to a country's wages you need to stop. The median equivalised disposable income (median household disposable income/equivalised household size) is around 16k euro, which is roughly the same as Italy and Spain, 5-6k lower than Germany/France/UK, but cost of living is much lower.
The reason why nominal GDP is inaccurate is because a lot of utilities are the same price wherever you go, sometimes cheaper in more expensive countries. I.e. an iPhone, a Macbook etc. It simply doesn't paint a realistic picture on how well-off a country is. Other than Gulf states, Ireland, and European microstates, nominal GDP per capita is far more accurate.
No. No country's nominal GDP fits the wages. Most European countries' average salary is around 2000 euro.
Both are wrong. Gross wages in the EU vary from 500 to 5000 euro and in general wages + employers taxes are higher than GDP per capita.
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Originally Posted by Greysholic
The reason why nominal GDP is inaccurate is because a lot of utilities are the same price wherever you go, sometimes cheaper in more expensive countries. I.e. an iPhone, a Macbook etc. It simply doesn't paint a realistic picture on how well-off a country is. Other than Gulf states, Ireland, and European microstates, nominal GDP per capita is far more accurate.
So because iPhone and a Macbook cost the same wherever you go, you should not use PPP? Maybe you should also mention that diamonds cost the same everywhere too?
PPP does take into account all forms of cost of living including your iPhone. But the majority of peoples expenditure is not uneccessary luxuries, but domestic goods and services that are much cheaper in for instance Taiwan than in Norway. That is why we have PPP.
Both are wrong. Gross wages in the EU vary from 500 to 5000 euro and in general wages + employers taxes are higher than GDP per capita.
Net wages are always much lower than GDP per capita suggests. Like half of it.
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So because iPhone and a Macbook cost the same wherever you go, you should not use PPP? Maybe you should also mention that diamonds cost the same everywhere too?
It's not just iPhone and Macbook. Most quality stuff cost the same wherever you go.
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PPP does take into account all forms of cost of living including your iPhone. But the majority of peoples expenditure is not uneccessary luxuries, but domestic goods and services that are much cheaper in for instance Taiwan than in Norway. That is why we have PPP.
Yeah right I'm sure that's why everyone's busy moving to Ukraine instead of Switzerland. Because it's cheap.
Net wages are always much lower than GDP per capita suggests. Like half of it.
If you want to check if GDP is overvalued compared to wages, you obviously need to use labour costs and not net wages. If the net wages are low because taxes are high, then its not the GDP per capita PPP that is misleading.
A lot of countries have labour costs that is around 20% higher than the GDP. Some countries do not, for instance Taiwan and Norway. Norway has a big oil sector that is heavily taxed, and the money is never converted into wages. I do not know Taiwans reason, maybe some of the money that should have gone to wages go to rich people or to the government, maybe Taiwan is cheating or maybe the remaining wages are paid in another way that is not recorded by the government.
Another interesting country is the US. Over the years labour costs as a share GDP has dropped, indicating that some of the money that should have gone to wages end up elsewhere.
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It's not just iPhone and Macbook. Most quality stuff cost the same wherever you go.
Sounds like you have a very expensive lifestyle. I totally get that you personally want to live in a country with high nominal wages so that you can have your iPhone, Macbook Pro, designer clothes and other things like starbucks coffee.
But a lot of people, me included, do not need that and will be able to reduce our expenditure if we live in a cheap country.
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Yeah right I'm sure that's why everyone's busy moving to Ukraine instead of Switzerland. Because it's cheap.
Ukraine GDP per capita is low even adjusting for PPP. If you want to prove anything you need to find a country with high GDP per capita PPP, but low nominal GDP per capita.
Taiwan is decently popular among immigrants despite its low nominal GDP. Why? Because unlike other countries with higher nominal GDP such as Italy and Bahamas the cost of living is low. For most people cheaper rent, cheap services and cheap restaurants are much more important than cheap iPhones.
Sounds like you have a very expensive lifestyle. I totally get that you personally want to live in a country with high nominal wages so that you can have your iPhone, Macbook Pro, designer clothes and other things like starbucks coffee.
But a lot of people, me included, do not need that and will be able to reduce our expenditure if we live in a cheap country.
Most people use iPhone in Taiwan. It's by far the most popular smartphone brand.
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Ukraine GDP per capita is low even adjusting for PPP. If you want to prove anything you need to find a country with high GDP per capita PPP, but low nominal GDP per capita.
Taiwan is decently popular among immigrants despite its low nominal GDP. Why? Because unlike other countries with higher nominal GDP such as Italy and Bahamas the cost of living is low. For most people cheaper rent, cheap services and cheap restaurants are much more important than cheap iPhones.
No, for most people higher salaries are much more important than cheap rent, services and restaurants. UK and France both have lower PPP per capita and are outrageously expensive (especially UK), but they are extremely popular migration destinations.
And even the ones who buy iOS, most likely are not spending a large share of their budget on luxury goods like you are. Hence, they do not agree with your argument that cost of living is irrelevant, because iPhone and Macbook Pro cost the same everywhere.
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Originally Posted by Greysholic
No, for most people higher salaries are much more important than cheap rent, services and restaurants. UK and France both have lower PPP per capita and are outrageously expensive (especially UK), but they are extremely popular migration destinations.
Again, you are just making things up.
First off, UK is not outrageously expensive. Just because your trip to London was outrageously expensive does not mean UK is outrageously expensive.
Secondly, France is not an extremly popular migration destination. EU-residents mainly goes to countries like Norway, UK, Germany, Switzerland. France is far down on the list. The only big groups moving to France are third world migrants and I can promise you they would also come to Taiwan if they let them.
And even the ones who buy iOS, most likely are not spending a large share of their budget on luxury goods like you are. Hence, they do not agree with your argument that cost of living is irrelevant, because iPhone and Macbook Pro cost the same everywhere.
There are several different Android brands and only one iOS brand. iPhone is by far the most popular brand.
And who says I'm spending a large share of my budget on luxury goods? My point is the world is way too integrated for PPP to be a useful metric. It's only useful for extremely isolated countries like Cuba or North Korea.
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Again, you are just making things up.
First off, UK is not outrageously expensive. Just because your trip to London was outrageously expensive does not mean UK is outrageously expensive.
Secondly, France is not an extremly popular migration destination. EU-residents mainly goes to countries like Norway, UK, Germany, Switzerland. France is far down on the list. The only big groups moving to France are third world migrants and I can promise you they would also come to Taiwan if they let them.
I lived in London for a whole year, it is outrageously expensive. Sure, it's cheaper outside of London, but overall cost of living is extremely high and quality of life is bad for a first world country. Public transportation is disgustingly expensive (not to mention crap) and rent is also very expensive.
France is a very popular destination for other EU nationals and people from third world countries. Many foreigners study in Paris and end up staying there. If you deny that you are a fool.
Btw I don't think third world migrants even know where Taiwan is so no they wouldn't come if we let them.
There are several different Android brands and only one iOS brand. iPhone is by far the most popular brand.
And who says I'm spending a large share of my budget on luxury goods? My point is the world is way too integrated for PPP to be a useful metric. It's only useful for extremely isolated countries like Cuba or North Korea.
You clearly are spending a large share, or else you would not use iPhone, Macbook Pro and quality products as a reason for why cost of living adjustments are not needed.
For ordinary people those kind of purchases are a tiny percentage of their monthly expenditure. Since you make a big deal out of it, it clearly is not.
PPP does take into account a normal expenditure of luxury goods, but domestic goods and services represent a bigger share.
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I lived in London for a whole year, it is outrageously expensive. Sure, it's cheaper outside of London, but overall cost of living is extremely high and quality of life is bad for a first world country. Public transportation is disgustingly expensive (not to mention crap) and rent is also very expensive.
It is funny how you can live in a country and know nothing about the rest of the country.
London is an extreme outlier in the UK. Most of the UK has rent that is 50 to 75% lower than London, they do not have extreme distances like in London so transport is much cheaper, groceries and eating out is cheaper than a lot of other european countries. Its not an outragously expensive to live in the UK, you were 100% wrong
Also you just said that things like rent, transportation does not matter. How come you believe it matters for London?
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France is a very popular destination for other EU nationals and people from third world countries. Many foreigners study in Paris and end up staying there. If you deny that you are a fool.
I decided to not post statistics to see if you were stupid enough to deny it, and you did. In 2017 Germany got 400k EU migrants, UK got 250k, Switzerland got 83k and even Austria got 58k. So how many did France get? 75k. So popular
But maybe 2017 was an outlier. In Germany 7.2% was born in another EU state, in the UK it was 5.7%, and in Switzerland it was 16.8%. So how many does France have, 3.2%. So popular
Btw I don't think third world migrants even know where Taiwan is so no they wouldn't come if we let them.
Nonsense. People in those poor countries spend their life savings to get away from the terrible conditions in their country so they can be smuggled to the west.
If Taiwan lets they come without having to do that, of course they would come. And yes they will hear about it, news like that spread like wildfire.
You clearly are spending a large share, or else you would not use iPhone, Macbook Pro and quality products as a reason for why cost of living adjustments are not needed.
For ordinary people those kind of purchases are a tiny percentage of their monthly expenditure. Since you make a big deal out of it, it clearly is not.
PPP does take into account a normal expenditure of luxury goods, but domestic goods and services represent a bigger share.
Almost half of Taiwanese ppl use an iPhone so Idk what you are on about. Many ppl have a lot of money. Average and median wealth in Taiwan is very high.
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It is funny how you can live in a country and know nothing about the rest of the country.
London is an extreme outlier in the UK. Most of the UK has rent that is 50 to 75% lower than London, they do not have extreme distances like in London so transort is much cheaper, groceries and eating out is cheaper than a lot of other european countries. Its not an outragously expensive to live in the UK, you were 100% wrong
Also you just said that things like rent, transportation does not matter. How come you believe it matters for London?
I decided to not post statistics to see if you were stupid enough to deny it, and you did. In 2017 Germany got 400k EU migrants, UK got 250k, Switzerland got 83k and even Austria got 58k. So how many did France get? 75k. So popular
But maybe 2017 was an outlier. In Germany 7.2% was born in another EU state, in the UK it was 5.7%, and in Switzerland it was 16.8%. So how many does France have, 3.2%. So popular
They still receive plenty of immigrants from other countries.
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