GDP per Capita (PPP)
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A GDP per Capita (PPP) is a GDP per Capita measure expressed in Purchasing Power Parity (PPP).
- Context:
- It can provide a more accurate comparison of living standards between regions than nominal GDP per Capita.
- It adjusts for differences in price levels and cost of living between countries or regions.
- It can be used to compare economic performance and living standards across different countries or regions with diverse economic conditions.
- It can be influenced by various factors, including economic policies, market conditions, and population growth.
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- Example(s):
- Counter-Example(s):
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- See: GDP Measure, Purchasing Power Parity, Standard of Living.
References
2020
- (Pascal & Eng, 2020) ⇒ Jean Bassino‐Pascal, and Pierre van Der Eng. (2020). “Asia's ‘little Divergence’in the Twentieth Century: Evidence from PPP‐based Direct Estimates of GDP Per Capita, 1913–69.” The Economic History Review 73, no. 1
- ABSTRACT: This article uses expenditure-based purchasing power parities (PPPs) to estimate GDP per capita in comparable prices for 12 Asian countries for six benchmark years during the period 1913–69. The article finds that in 1913 levels of real GDP per capita in several countries were comparable to those in Japan. GDP per capita in Japan and other Asian countries diverged during and after the First World War. The article questions whether Asia's ‘little divergence’ between Japan and other Asian countries dates back to the late eighteenth century. It draws attention to the different resource endowments of Japan, China, and India compared to other Asian countries, and their implications for the development trajectories of Asian countries. The article demonstrates that using historical PPP estimates yields estimates of GDP per capita that diverge from those based on retropolations of the single 1990 PPP-converted benchmark year. It concludes that historical estimates of PPPs are needed to confirm analyses of comparative economic performance based on available GDP per capita data.
- QUOTE: This article addresses these questions with direct comparisons of GDP per capita, based on historical estimates of binary expenditure-based PPPs, for six benchmark years (1913, 1922, 1938, 1952, 1958, and 1969), across 12 Asian countries: Burma, Ceylon, India, Indonesia, Japan, (South) Korea, Malaya-West Malaysia, the Philippines, Taiwan, Siam-Thailand, Vietnam, and to some extent China.22 Such PPPs may be more appropriate for addressing the issue of economic divergence or convergence in Asia, and the possibility that Japan’s level of economic development was ahead of the rest of Asia before the First World War, than retropolations of the benchmark year of 1990.