Test Yourself
I've been linking to Dani Rodrik a lot, and I'm not ready to back down. He has posted a quiz question: would you rather be rich in a poor country or poor in a rich country? More specifically, would you rather be in the bottom decile in a top-decile country, or top decile in a bottom-decile country? Assume you only want to maximize your own consumption. Anyway, feel free to post your answers here as well as on his blog. I don't really care if this is a scientific survey, so I might as well make a guess. My guess is that it's better to be rich in a poor country. Rodrik says it's not even close, but it does seem like a close question to me. I must be missing something.
posted by James | 1:38 PM
4 Comments:
So you don't care about status except insofar as it produces material goods? I mean, shit, I have no idea; it probably depends on your preferences; but given some assumptions it should be possible to produce a clear answer. I'm curious, anyway.
WTF? The question is idiotic. The real question and whether you'd rather be rich in a poor country or well-off in a rich country (assuming same absolute level of wealth). See, if you're rich (relatively) in a poor country, you can use/abuse other people in ways that you can't in more egalitarian, enlightened countries.
Who the fuck would want to be poor in any country?
I'm not entirely sure the question is idiotic. I should clarify that Rodrik isn't asking, "Would you rather be rich or poor?" Rather, he's asking, "Would you rather be rich in a poor country or poor in a rich country?"
So the average rich person in Mali (recall that Rodrik defined this as someone in the top decile) makes about $4,900 a year. That's $4,900 in purchasing power parity, meaning it's what $4,900 would get you in the US. In nominal terms the average rich person in Mali makes under $2,000.
The average poor person in Switzerland (defined as someone in the bottom decile) makes about $8,700 a year, again in purchasing power parity. In nominal terms, the average poor person in Switzerland makes over $13,000 per year.
This result is interesting and counterintuitive (to me), so I don't regard Rodrik's question as idiotic.
A few more data points:
The average rich person in Ethiopia earns $3,155 PPP and a nominal $590 per year.
The average rich person in Sierra Leone earns $3,820 PPP and a nominal $875.
The average rich person in Tanzania earns $2,235 PPP and a nominal $1,000.
The average poor person in Finland earns $13,750 PPP and a nominal $15,730.
The average poor person in Canada earns $9,770 PPP and a nominal $9,130.
The average poor person in the United States earns $7,750.
The average poor person in Japan earns $15,895 PPP and a nominal $18,500.
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