Alberto Cottica on Nostr: 7/ But PPPs come with all sort of statistical pitfalls. The one that interests us ...
7/
But PPPs come with all sort of statistical pitfalls. The one that interests us here is this: they are calculated on the basis of a basket of goods that attempts to account for a broad range of goods and services, including those that are irrelevant to measuring poverty – like jewelry, luxury restaurants, commercial airfare. In this situation, if the prices of essential goods rise faster than the growth of PPP income, poverty might increase.
But PPPs come with all sort of statistical pitfalls. The one that interests us here is this: they are calculated on the basis of a basket of goods that attempts to account for a broad range of goods and services, including those that are irrelevant to measuring poverty – like jewelry, luxury restaurants, commercial airfare. In this situation, if the prices of essential goods rise faster than the growth of PPP income, poverty might increase.