What do you do if one of your fiend ask you to help him compare the standard of living between two countries such as Thailan and Vietnam ? Maybe you will tell him to use the "GDP per capita" , which is the avarage value a person earns in one year. But this method is inappropriate. Why? Look into an example
100$ in Vietnam can help you have a good living in one month. But with the same amount of money in US, you cannot pay for one-month house renting. And it's very clear that $100 in Vietnam is more valuable than 100$ in US.
So how can we compare the standard of living? That's PPP - Purchasing Power Parity, the amount of goods a person can afford to buy with his income. Below are PPP/GDP of some countries.
US 41399$ / 42000$
Japan 30615$ / 35757$
Malaysia 11201$ / 5042$
Thailand 8368$ / 2659$
China 7198$ / 1709$
Vietnam 3025$ /618$
And it is quite easy to infer from figures above, the standard of living in US is 13 times more comfortable than in Vietnam , follow by Japan, Malaysia, Thailand, China with 10 / 3.7 / 2.6 / 2 times than Vietnam. Maybe it the main reason make many Vietnamese immigrate to US
Final question, how do people calculate the PPP index? Unfortuanately, I do not study about Finance, so I cant help you answer it . But a completed answer can be easily found on Wikipedia.org
Thứ Năm, 21 tháng 9, 2006
12:33 Ngon Pham 8 comments