Tuesday, May 27, 2008

Purchasing Power Parity and Life Expectancy

I've discovered something called Purchasing Power Parity. If I understand it correctly, this makes for more meaningful comparisons amongst countries than GDP per capita.

In 1980, someone plotted this PPP against life expectancy and yielded this which shows a proportional relationship between PPP and life expectancy, i.e. the higher the PPP, the higher the life expectancy. At higher PPPs the curve flattens out. If this is still accurate in 2008, then my little graphs and conclusions below and below are all wrong.

But I'll re-do the exercise for the CIA's most recent numbers and we'll see how it looks. Predictions?

[Update: see above]


Scooter said...

I'd try to make a prediction if I could make heads or tails of any of it. What was it Barbie used to say? Math is hard.

What is really scary is that I'm the math/finance go to guy at the firm.

Scooter said...

I'd guess that developing countries have the highest Purchasing Power Disparity...Mexico, sub-Saharan Africa, etc. I'd also guess that the poor in those nations suffer the most from malaria (a staggering killer of kids) and HIV/AIDS.