The international comparison program and purchasing power parities for construction

Rick Best*, Jim Meikle

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingOther chapter contributionResearchpeer-review

1 Citation (Scopus)

Abstract

It is not uncommon to hear or read statements that suggest that people in some countries are living on just a couple dollars a day. “How can they survive?” we ask ourselves. The answer is that price levels are different between countries, and that is very much the case between wealthy industrialized nations and poorer developing countries. If one earns five local dollars a day and it costs only two to live, then survival at least is possible. The inconsistency lies in the use of money market exchange rates to convert amounts of money to the same currency and thus compare incomes and the price of goods in one currency with those in another. Comparing national economies via measures such as gross domestic product (GDP) using exchange rates to bring amounts expressed in various local currencies to a common base currency produces a view of relative wealth that can be very much distorted by price-level differences between countries.
Original languageEnglish
Title of host publicationMeasuring Construction: Prices, Output and Productivity
EditorsR Best, J Meikle
PublisherRoutledge
Chapter4
Pages45-58
Number of pages14
ISBN (Electronic)9781134687282
ISBN (Print)9780415659376
DOIs
Publication statusPublished - 17 Apr 2015

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    Best, R., & Meikle, J. (2015). The international comparison program and purchasing power parities for construction. In R. Best, & J. Meikle (Eds.), Measuring Construction: Prices, Output and Productivity (pp. 45-58). Routledge. https://doi.org/10.4324/9781315882925