What Does $1 a Day Really Mean?

We hear a lot about people who live on “less than a dollar a day.” But a dollar buys a lot more in some countries than it does in others. That’s why some economists believe a better way of understanding the relative income of people around the world is through something called Purchasing Power Parity.

A simple way of understanding this concept is through the words of BBC Reporter Mukul Devichand, who explains how the “Big Mac Index” — first coined by The Economist — is a good way of understanding price differences between countries.

The idea, says former World Bank economist Michael Ward, is that the Big Mac is an almost identical product no matter where in the world you buy it — bread, cheese, meat, lettuce and labour costs. But in fact, Big Macs end up costing much less in places like Beijing or Mumbai than London or New York.

So economists use the different prices of Big Macs across the world to judge the relative buying power of people in different countries. For example, if a Big Mac costs a dollar in America, but only 25 cents in Mumbai, then a PPP "dollar" in Mumbai is actually worth only 25 cents.

It’s a good idea to keep the dollar’s relative worth in mind when checking out the portfolio of pictures on onedollaroneday.org, sponsored by our sister site Global Citizen Corps. The site is challenging its visitors to submit photos that answer the question, “What can you eat on a dollar a day?”

With Global Citizen Corps’ global audience, it’ll be interesting to see how submissions from the U.S. differ from those from, say, Spain or Syria or Sudan.

Students aged 14-25 can register with Global Citizen Corps and submit their photo on flickr.com. The grand prize is a digital camera, with Amazon.com gift cards for second and third place. The deadline is August 20.


Comments

We really do live in an

We really do live in an excessive world.

in United States

financial struggles

Everyone will remember where they were when the largest bank failure in U.S. history went down. On Thursday, September 25, Washington Mutual voluntarily filed for Chapter 11 bankruptcy protection. The Federal Deposit Insurance Corporation seized the struggling savings and loan’s assets and the company went into receivership. This could have been shattering to America’s economy. "Consumer watchdogs" who hound payday cash advance lenders would slink off with their tails between their legs. J. P. Morgan Chase came in to buy them out at zero hour, preventing the worst of the carnage, but the menacing warning signs remain. Will more banks fail? What would have happened if J. P. Morgan Chase hadn’t bought WaMu and the FDIC had had to pay customers back? That would have meant up to $100,000 per individual and $200,000 per joint account, as well as $250,000 for IRAs and so on. Many economists are fearful that such a bailout would have drained at least half of the FDIC’s reserves, which would, without doubt not mean well if more banks fail. Much of this can be chalked up to too many banks becoming too greedy and too deep into the depths of the subprime home lending market. There is some fear that we'll go even deeper into the dilemma, others think the problem will fix itself. In times like these, payday loans can can offer short-term relief when the banks can’t.

Post new comment

Your email address is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <img> <blockquote>
  • Lines and paragraphs break automatically.

More information about formatting options


Breaking News

UNHCR Chief Urges Adherence to Humanitarian Principles in Gaza Conflict

AlertNet - Mon, 01/05/2009 - 08:39
High Commissioner Guterres calls for strict adherence to humanitarian principles in Gaza, including respect for the universal rights of those fleeing war to seek safety in other states.

Living Apart for the Paycheck

International Herald Tribune - Mon, 01/05/2009 - 22:48
More Americans are opting for commuter marriage to secure financial stability.

Russia's Gas Monopoly In Spotlight Again

NPR - Mon, 01/05/2009 - 03:00
Just like in 2006, Russia has shut off natural gas supplies to Ukraine and raised fears of an energy crisis in Europe.

Global Markets Buoyed by Optimism

Al Jazeera - Mon, 01/05/2009 - 03:59
Stimulus plans boost confidence but UN expected to issue grim economic report.

India Unveils Economic Boost Plan

BBC News - Fri, 01/02/2009 - 07:15
Indian authorities unveil a fresh economic stimulus package, including another cut in the country's main interest rate.

Recent comments

An initiative of Mercy Corps
“You must be the change
you wish to see in the world”
Mahatma Gandhi
Learn more about Mercy Corps >

Efficiency

Over the last five years, more than 89% of Mercy Corps' resources have been allocated directly to programs

Excellence

Mercy Corps is a Charity Navigator 4-star charity.

Click to view our rating from America's premier charity evaluator.

High Value

Every dollar you donate to Mercy Corps helps us secure $20.89 in donated food and other critical supplies.

Mercy Corps — Dept. W — 3015 SW First Ave — Portland, OR 97201
All original content Copyright © 2008 Mercy Corps. Quoted and linked content is property of the creator(s). Mercy Corps will not sell, rent or trade your personal information.