What is Purchasing Power Parity?

[sayareakd]

PPP is most practical thing. what money is worth in each country and how much things it can buy in that country.

this list will give you something interesting to look at

List of countries by GDP (PPP) - Wikipedia, the free encyclopedia

 

[trackwhack]

A troll? me?

that's like a pot calling a Kettle black.

Most of my rants have been against PPP being used for defense deals - read up and you will know. So STFU and go jerk off elsewhere.

What PPP used for defence deals, where do you come up with such pearls? Why are talking non stop nonsense man? PPP is an appropriate measure of the standard of living of the people of a nation. Nominal GDP is an inaccurate measure. That is why PPP exists.

Neither has anything to do with how much money exists in the govt. exchequer to do business. Your statement was

"PPP is a term made up to make developing nations feel good about themselves"

which is absolute nonsense, rubbish and proves that you have no idea about even the most basic of economic principles. You can pretend and quote articles and do what you want to justify what you said but it does not change the fact that you said it and hence makes you nothing more than a blithering idiot.

 

[ace009]

Read the posts dude - and read the article I posted. MAYBE you will understand why I said it. I still stand by it ...

"PPP is a term made up to make developing nations feel good about themselves"

Just stop being the annoying idiot you are ...
if you don't understand, read up - maybe someday you will.

 

[trackwhack]

Read the posts dude - and read the article I posted. MAYBE you will understand why I said it. I still stand by it ...

"PPP is a term made up to make developing nations feel good about themselves"

Just stop being the annoying idiot you are ...
if you don't understand, read up - maybe someday you will.

I can only but laugh at your ignorance. Blissful ignorance!

 

[Mad Indian]

To answer your question we have to look further than just who is "richer" - define "richer".
In the USA, people save very little outside their retirement savings. The culture is different - here consumerism is rampant and spending your excess money is the norm. In India saving is more common.
But back on topic, the better term is "disposable income". After paying for the expenses for the necessities who will have more "disposable income".
Also you have to look at which city you are living in - let's compare Bangalore and Boston resident. also, I guess your numbers are not for "take home salary" but you have to pay taxes - right?
If you work in Bangalore and get paid 2L a month, then 25% goes in taxes (50K gone). Then say ~50K goes in rent (correct me if I am wrong in my assessments - I have not lived in Bangalore in 15 years)? If you own a car, then maintenance, insurance and gas will be ~25K a month? Food (home and eating out) will be 10K a month? Utilities - Entertainment (cable TV), electricity, internet, telephone, cellphone etc put together is another 10K a month? You will keep a maid, a driver maybe? Together another 15K a month? Clothes, shopping miscellaneous expenses etc 10K a month? So, all put together you are looking at 1.2L a month - so a net "disposable income" of 30K a month - equivalent to $600.
Now look at a Boston resident with $6K as salary.
28% goes in taxes - leaving $4320 net salary. Add Health insurance at $220 a month. Rent is say $1400 a month. Own a car - $500 a month. with gas and insurance etc. Food and eating out is $500 a month. Utilities would be $300 a month. Miscellaneous is say another $500 a month. Total of $3420 - leaving $900 as disposable income.

Did that answer your question?

Hey where did you come up with that 50000rupees rent...???/ Its at the max 15000 or 20000, for food at the max 3000 permonth if you are living with your family... for petrol and all that stuff along with the entertainment i never saw any one spending over 20000 per month( by everything i MEAN every expense you can think of...) so a person earning 1.5L rupees a month will save close to 50000rupees a month(which is your disposable income).... And even after that you are forgetting that these 50000 will be spent inside India so it should be compared with the price hear and not with the US, see for instance one pocket of bread here is only 20rupees and not 1-2$(approx.) there... why this is relevant is because you will be buying immovable and movable assets in India on prices existing here ... Isn't it... But i am all ears if there is any flaw in my statement... your turn.....

 

[Mad Indian]

To answer your question we have to look further than just who is "richer" - define "richer".
In the USA, people save very little outside their retirement savings. The culture is different - here consumerism is rampant and spending your excess money is the norm. In India saving is more common.
But back on topic, the better term is "disposable income". After paying for the expenses for the necessities who will have more "disposable income".
Also you have to look at which city you are living in - let's compare Bangalore and Boston resident. also, I guess your numbers are not for "take home salary" but you have to pay taxes - right?
If you work in Bangalore and get paid 2L a month, then 25% goes in taxes (50K gone). Then say ~50K goes in rent (correct me if I am wrong in my assessments - I have not lived in Bangalore in 15 years)? If you own a car, then maintenance, insurance and gas will be ~25K a month? Food (home and eating out) will be 10K a month? Utilities - Entertainment (cable TV), electricity, internet, telephone, cellphone etc put together is another 10K a month? You will keep a maid, a driver maybe? Together another 15K a month? Clothes, shopping miscellaneous expenses etc 10K a month? So, all put together you are looking at 1.2L a month - so a net "disposable income" of 30K a month - equivalent to $600.
Now look at a Boston resident with $6K as salary.
28% goes in taxes - leaving $4320 net salary. Add Health insurance at $220 a month. Rent is say $1400 a month. Own a car - $500 a month. with gas and insurance etc. Food and eating out is $500 a month. Utilities would be $300 a month. Miscellaneous is say another $500 a month. Total of $3420 - leaving $900 as disposable income.

Did that answer your question?

Alternately here is another explanation to your question in your own terms..... 2L rupees equals 4k$ isn't it.... So for 6k$ the equalent is 3L rupees is it not...??? so even with 25% of the excess 1L rupees or 2000$ taken as tax, we get 1500$ right...???? so as per your own calculation, a person earning 3L in india(or 6K$) will be saving (or disposable income as you call it) 1500+300$ against a person living in USA earning 6K$ saving only 900$...??? So who is richer based on the same income... the indian right..???? This is a very simple explanation for PPP and why PPP is more important than nominal comparison....


Feel free to disagree with "facts"... but keep it simple like your above reply :thumb::thumb:......

 

[amoy]

As most of u are NRI with experience both 'inside and outside', would u compare the US with India for the gap btwn the take-home pay (post tax 'net') and advertised package (here called 'gross') , owing to different tax tariff and social security coverage?

Normally in China for example, compulsory items incl. 1. income tax 2. medical insurance, endowment insurance and unemployment insurance 3. housing fund. Employees contribute to half of (2) & (3) out of the advertised package while employers shoulder the other half.

 

[Mad Indian]

I personally believe PPP is not as important as nominal GDP, a barrel of oil cost the price of a barrel of oil regardless of your PPP. However, it is still a important figure,

Nominal gdp is only important for trade..... For instance lets say a person has exported an item for 100$, but now he will use that 100$ inside the country at a rate defined by the local exchange rates , hence we use the notion of PPP, and frankly what he can get is more important than what he is earning per se dont you think...???