Metric – Worldwide Buying Power – Normalizing wealth

I invented a new metric because I was thinking last time how hard it is to compare income worldwide and be able to know if life would be better somewhere else.

If you earn more but the cost of life is higher, what is the point of moving there ?!

So what about a metric for that ?

The Metric

Take your incomes and expenses and get the money you have left to spend freely at the end of the month, after rent, bills, etc… Let’s call it M ( for money ! ).

Now go online and search the average cost a beer in a bar in your city. Let’s call it B ( for beer ! )

The metric would be M / B = the buying power you have.

For instance, if you have 1000 left at the end of the month and the beer price is 2 ( no unit here because it is whatever the money you have in this country ). Then, the metric will be 500.

However, if you have 2500 left at the end of the month and the beer price is 5. The metric result is 500 as well.

So even tho it seems like you are making way more money, at the end of the day, you have the same buying power in those two places.

I chose beer value because this is the one you might know on top of your head the most easily. It is also a product available worldwide. I am sorry for people who are not drinking.

Other Ideas

I was thinking of using the price of a kg of pasta however, this is varying a lot from store to store. And I don’t know the price on top of my head. Also, I was thinking of using the quantity of year necessary with this money to buy a house, but the price is changing too much as well. So… beer it is !

What about you?

Let me know what is your number in the comments below !

Mine is 500.


This idea would fit well with the Idea repo we new have.

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