If you want to convince people that the communist economic model is better than the Western one, thinking in terms on median income instead of mean income as important helps.
Income (and wealth) in societies tends to be distributed according to a power law. That makes the mean a bad estimator regardless of your ideology. The Western economic literature almost universally uses the median when discussing income and wealth comparisons.
The Western economic literature almost universally uses the median when discussing income and wealth comparisons.
I see a lot of data expressed in GDP per capita to compare the wealth of different nations. http://www.gapminder.org/ for example uses it. The CIA Worldbook does so as well.
If the economics literature really does things different this seems to be a neat way that the CIA is actually using to push it’s policy agenda.
If you have nearly data over the median income of countries all over the world over the last 100 years I would be interested in the data set.
GDP per capita is the aggregated Gross Domestic Product of the entire country divided by its population. It says nothing about income or wealth distribution within this country. It is also NOT the mean of personal income in that country.
GDP per capita basically tells you how much does a country produce, normalized for its population.
a neat way that the CIA is actually using to push it’s policy agenda
If you have nearly data over the median income of countries all over the world over the last 100 years
I don’t and I doubt it exists. You can find estimates of median income for developed countries during the last couple of decades easily enough in the usual places, but beyond that the data is likely to be sparse to absent.
While the basic fact is that Christian is wrong, I think your response is an over-reaction. For example, the main point of PPP is to use GDP per capita as a typical income.
the main point of PPP is to use GDP per capita as a typical income.
Why do you think so? As far as I am concerned, the main point of PPP is to adjust the FX rates to make comparisons (of incomes, costs, living standards, etc.) between countries more meaningful.
PPP has nothing to do with the relationship between GDP per capita and personal (or household) income.
Exactly. Someone succeeded in making the most common use of PPP something for which it’s logically inappropriate. Of course it can be an accident of history but it’s still interesting.
If your goal is to understand the difference between median and mean, developing sensitivity for issues like that is the point. Even if it’s all accidents of history, you want to have issues like that get your conscious attention when looking at statistics.
The fact that the CIA factbook happens to be the best source of knowledge and the CIA is an organisation that heavily invest into shapping public discourse is something that can raise a bit of attention.
Of course it can be just because some bureaucrats inside the CIA are stupid that they don’t give you the median income, because the have never thought that anyone would be interested in the median income.
A much better explanation of why they don’t give you that data is that they actually want that the GDP per capita is used that way. That people use GDP per capita when they want to think of the typical income of a country.
If people don’t have any good data of the median income of countries, than that’s what happens. Because of decisions by the CIA GDP per capita data is available but median income of countries isn’t.
Statisticians in the CIA aren’t stupid. They should at least be aware of the effects of choosing to report the wealth of countries that way.
The CIA also takes information warfare seriously. I live in Germany. After WWII there was a lot of investment in shaping German public opinion by the CIA.
In the West people would be upset if the CIA world factbook gives them wrong numbers but nobody is upset if they are just given a number like GDP per capita when they want to know about the typical income.
Income (and wealth) in societies tends to be distributed according to a power law. That makes the mean a bad estimator regardless of your ideology. The Western economic literature almost universally uses the median when discussing income and wealth comparisons.
Given that the utility of money is (assumed to be) logarithmic, what I’d be curious to know is the geometric mean income of countries.
I am sure Google can point you in the right direction.
I see a lot of data expressed in GDP per capita to compare the wealth of different nations. http://www.gapminder.org/ for example uses it. The CIA Worldbook does so as well.
If the economics literature really does things different this seems to be a neat way that the CIA is actually using to push it’s policy agenda.
If you have nearly data over the median income of countries all over the world over the last 100 years I would be interested in the data set.
GDP per capita is the aggregated Gross Domestic Product of the entire country divided by its population. It says nothing about income or wealth distribution within this country. It is also NOT the mean of personal income in that country.
GDP per capita basically tells you how much does a country produce, normalized for its population.
I don’t and I doubt it exists. You can find estimates of median income for developed countries during the last couple of decades easily enough in the usual places, but beyond that the data is likely to be sparse to absent.
If you don’t have the data how would you go about comparing the wealth of different countries based on it? I don’t see how those claims fit together.
I wouldn’t. At least until the concept of “wealth of a country” gets defined.
But to answer your question, reread the last paragraph, particularly the part which starts “you can find...”.
While the basic fact is that Christian is wrong, I think your response is an over-reaction. For example, the main point of PPP is to use GDP per capita as a typical income.
Why do you think so? As far as I am concerned, the main point of PPP is to adjust the FX rates to make comparisons (of incomes, costs, living standards, etc.) between countries more meaningful.
PPP has nothing to do with the relationship between GDP per capita and personal (or household) income.
Yes, PPP is logically independent of GDP, but PPP GDP per capita is quite popular, probably the most common use of PPP.
Exactly. Someone succeeded in making the most common use of PPP something for which it’s logically inappropriate. Of course it can be an accident of history but it’s still interesting.
If your goal is to understand the difference between median and mean, developing sensitivity for issues like that is the point. Even if it’s all accidents of history, you want to have issues like that get your conscious attention when looking at statistics.
The fact that the CIA factbook happens to be the best source of knowledge and the CIA is an organisation that heavily invest into shapping public discourse is something that can raise a bit of attention.
Of course it can be just because some bureaucrats inside the CIA are stupid that they don’t give you the median income, because the have never thought that anyone would be interested in the median income. A much better explanation of why they don’t give you that data is that they actually want that the GDP per capita is used that way. That people use GDP per capita when they want to think of the typical income of a country.
If people don’t have any good data of the median income of countries, than that’s what happens. Because of decisions by the CIA GDP per capita data is available but median income of countries isn’t.
Statisticians in the CIA aren’t stupid. They should at least be aware of the effects of choosing to report the wealth of countries that way.
The CIA also takes information warfare seriously. I live in Germany. After WWII there was a lot of investment in shaping German public opinion by the CIA. In the West people would be upset if the CIA world factbook gives them wrong numbers but nobody is upset if they are just given a number like GDP per capita when they want to know about the typical income.
It is not the “most common use of PPP”, at least in my neck of the woods.
It is not, not even close.
It is not.
Really..? Are you posting drunk or something?