Purchasing power disparity and the consumerism index

By | February 9, 2014
Other than this metric being a load of fun, it makes you think. There is a considerable difference in what you can afford p consume in diffeveent countries. which indicates that our economic system is consumerist driven more than anything else. But what impact does that have on the environment, resource management, sustainability or even cultural values? Are there any systems to measure the consumerism index in?

/via +Ali Adelstein

Reshared post from +Yonatan Zunger

The most meaningful way to compare wages across countries or regions is always to compare them against the local cost of living. This can be complicated, because it isn't always easy to define what a basic living package is: people eat different foods in different areas, have different transport needs, and so on. (For example, if you live in a place where you need a car to get to your job, that car is going to be part of your most minimal cost of living — but if you can walk or train to work, it isn't) Likewise, there are some goods which simply aren't available everywhere, like clean water.

So this chart, despite being a quick piece of work by someone, is actually surprisingly informative. Beer is something which is available and commonly consumed around the world, (with a few notable exceptions like Utah and Saudi Arabia) and it takes up roughly the same role in the dietary hierarchy in all of these places. So despite not being part of the "core" of anyone's diet, the price of beer is actually not a bad bellwether of the overall prices of basic consumer goods.

Minimum wages are more nebulous — they're the consequences of laws, and don't always indicate market conditions. (For example, Georgia appears to have an anomalously low minimum wage relative to cost of beer from this diagram, but I don't think that it's actually in significantly worse shape than Bangladesh; I suspect an anomaly in how their minimum wage works relative to their market, rather than a real economic issue) A better measure would be to look at different percentiles of the economy: e.g., how many hours does someone at the 25th percentile — someone who makes more than 1/4 of the population and less than 3/4 — have to work to earn a beer? Unfortunately, good percentile data is harder to come by than good minimum wage data, simply because the latter can be looked up.

Nonetheless, this graph gives you an interesting insight into the relative cost of basic foods in different parts of the world.

How many hours of minimum wage work it takes to earn a beer
This article has been corrected. Throwing back a cold one can be a costly affair—especially if you’re living off the minimum wage in a country like Georgia or Bangladesh. How do we know that? Because we made a Beer Index. Numbeo, a crowd-sourced database of the price of goods around the world, maintains a comprehensive list…

0 thoughts on “Purchasing power disparity and the consumerism index

  1. Les Piffles

    While the study does tickle one's interest, you can hardly call beer "basic food". It would make more sense to base wealth on the work required to purchase a loaf of bread or a kilo of potatoes for the west, a kilo of rice in asia, etc. Something that really is a basic and univeral component of a country's diet. I'm sure the results would be quite different.

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  2. Francois Demers

    +Sophie Wrobel I get the real point but the study is flawed and you can see that as soon as you look at Georgia: it is a wine country, not really a beer producer. And is you visit Tbilisi, you will see so many beggars on the street you could infer that begging pays more than earning minimum wages.
    I would love to see results based on "How long does it take a Coca-Cola delivery person to earn enough to buy a Coca-Cola?" Fountain barrels, not cans.

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