Upgrade your account to a Community Supporter account and remove most of the site ads.
Rocket your D&D 5E and Level Up: Advanced 5E games into space! Alpha Star Magazine Is Launching... Right Now!

Reply to thread

Message: <blockquote data-quote="Jfdlsjfd" data-source="post: 9518694" data-attributes="member: 42856">There is a probably a confusion in the argument, between $ as in USD and $ as in PPP dollars. I don't think anybody said "how, poor people, they must leave with 1$ a day so they must starve since it doesn't even buy you a coffee". The measure used (and mentionned first by [USER=6778479]@Shadowdweller00[/USER]  was always PPP dollars, which have the property of being multiplied by the local cost it takes to buy a standardized array of goods. It is a much better measure because it takes into account that a person in a poor country will not pay the same thing for its vegetable or haircut that one in a wealthy country, so a USD will buy more than it would by just using the exchange rate between the local currency and the USD. The PPP dollars takes that into account.It is however still an imperfect measure, because it uses a standardized array of goods, and in reality, people in different country don't have the same spending patterns. As [USER=9254]@kigmatzomat[/USER] illustrated, solutions can be found for less buy not buying the standardized array of goods. This array contain both "imported goods and service" that are priced on a world market (oil, iphones) and "local goods" where there is no external cost and that is priced mostly with local expenses. The international goods in the array skew the cost of life higher, while in reality, the buying pattern of a local resident of an impoverished country is simply different, avoiding international goods.[URL unfurl="true"]https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Purchasing-Power-Parity-PPP[/URL]But it's still a better measurement than just convering the average wages of a foreign country into the local currency, as journalists are prone to do.Another illustration: in my country we have several overseas territories. Civil servants posted there gets an extra allowance covering the price difference between mainland and overseas territories. It can be as much a 70% pay increase, depending on which territory. That's enough to cover the increased cost... should they consume the exact same things they would if they were on the continent. In practice, it can be a great opportunity to save money if one is willing to change eating pattern and eat mostly locally grown products instead of imported products from the mainland, because due to the price of import, dairy product cost like 3x the price of mainland, while fruits are inexpensive as they can be imported from surrounding poorer countries. So sure, the average can be a 70% difference in price, but more often than not, the consumption basket changes, so you don't pay the 70% increase that is theoretically calculated the same way the PPP dollar value is calculated.</blockquote>

Verification