Converting analogous salaries in one country to another?

Question

Example: Someone who makes $30,000/yr (USD) in Ethiopia would be living the same as someone who makes $XYZ (USD) in the U.S.

Do you use average income, GDP per capita, buying power?

This is the problem I'm trying to solve:
Being paid a salary of X amount (in currency of country A) living in country B, that would be the same as being paid Y amount in country A.

with "the same" I guess meaning having the same relative standard of living between you and the rest of the citizens of that country.

(i.e. are you Bill Gates, an average middle-class, etc. You salary is 5x more in each country,maybe?)

Let me know if this doesn't make any sense. It's hard to explain what I'm trying to get at.

Thanks,

-MIke

Answer 1

http://www.finfacts.com/costofliving.htm
has the cost of living for a developed world life style in major cities in the world. This style of living is surprisingly expensive in poor countries because the goods consumed are largely imported but most people consume locally produced goods which are much cheaper. PPP is purchasing power parity of for an average consumer in the county in question eating local food and living in average housing. When comparing countries you can get very different answers depending on the basket of goods you are pricing, or the income level of the consumer.

Answer 2

Ok...

I see where you're going.

ignore those who say GDP per capita, or PPP itself. This is just indirect measure... let alone, it doesn't account for social system.

You could as well have 100 000$ in US, but tuition, HI, childacare... it could eat all your money in second. Let alone, if you go sick, lose job-lose HI- you can end up on street.

This is why it is impossible to calculate anything from GDP or PPP figures themselves.

Take average salary, and BUY same basket in every country-
THEN you could see something. Still, as i say, social/education services in US are almost nonexistant, and can well accumulate at 100s of thousands over some time.
Also, social help differs between countries... SOME pay everything, flat, HI, kindergartens, free Uni, food for you etc.
some like US-don't.

In average, it's much better to live in developed country, regardless of salary, for it's infrastructure, health access etc.
means a lot.

Also, baskets between countries are different... people have different habits.

For variety of reasons, some of which i mentioned, it is downright impossible to solve this problem for sure.

If you're "poor" in Sweden, even with no job-you'll probably live better than almost anyone in Ethiopia, for many reasons.

EVEN the cost of living index is often a miss... for a variety of reasons :)

Answer 3

The comparisons only make sense so far. Whatever you earn in Ethiopia, you are still living in the middle of a gradually subsiding civil war in one of the world's poorest nations. Moreover, Ethiopia still maintains government ownership of land, so you can't own real estate, no matter what the price is. The government also owns telecommunications, which means that if you want a mobile phone or high-speed Internet, you have to have a satellite hookup. The list goes on...

Answer 4

The term is "Purchasing Power Parity."

This is a great site for comparing areas of the industrialized world, not just countries, based on GDP and Purchasing Power Parity. Give it a look - http://www.demographia.com/db-gdp-metro.pdf

Answer 5

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