PPP in Sydney and Tehran
There is a concept in economics which is called purchasing power parity. In the website of World Bank we can find the definition of this concept as follows:
“A method of measuring the relative purchasing power of different countries' currencies over the same types of goods and services. Because goods and services may cost more in one country than in another, PPP allows us to make more accurate comparisons of standards of living across countries. PPP estimates use price comparisons of comparable items but since not all items can be matched exactly across countries and time, the estimates are not always robust.”
I would like to implement this concept, not with currencies but regarding purchasing power. Very interesting issue.
Let’s consider this example.
In Australia, an unskilled Australian can earn $15 per hour. Australian means anybody who can legally work inside the country. In Iran the salary of an unskilled worker is max 5000 tooman per day. If the work includes just 8 hours, it means max 700 tooman per hour. To make it easy let’s say 1000 tooman per hour is the salary of an unskilled worker.
Now, we can compare what each of these two workers can buy from their one hour salary. In Sydney which is an expensive city in the world, you can find a $5 steak in a restaurant. So you can buy three steaks or you can buy kg3 minced meat or you can buy kg15 orange in Chinese market. In Iran, with 1000 tooman you can buy a ham sandwich from haida or one kilogram orange or maybe gr200 meat.
I think it doesn’t need more analysis. It’s clear.
The latest yahoo news pic
Tehran Prosecutor General Saeed Mortazavi (2nd L) attends the execution by hanging of Majid Kavousifar and Hossein Kavousifar in Tehran August 2, 2007. Iran hanged Majid and Hossein, the killers of a judge, Hassan Moghaddas, who had jailed several reformist dissidents, before a crowd of hundreds of people on Thursday. The banner reads: "We give our condolences to all our judiciary colleagues and the deceased family on the anniversary of the martyrdom of Hassan Moghaddas". REUTERS/Morteza Nikoubazl (IRAN)
4 comments:
Hi,
it's an intresting subject to survey, you know one of the deciding factors on FOREX trading is PPP, increasing in this factor cause to inflate the country's currency.
tnx
Your analyse was so real and clear. There is no doubt that there is a great and tall wall between needs and pays in Iran. And in an developed country az AUS they have done their best to break this wall.
It's a great topic. The economical one I mean. One time that you wrote about salary in Australia I tried to account like this but I couldn't because I didn't have any information of cost of things from over there.
And just one more thing, majority of costs increase in Iran. for example: a ham sandwich is 1400 (the chipper one in Hida), we couldn't find 1 kg orange with 1000 tomans in recent winter and also 1 kg meat is about 7000 tomans, I mean less than gr200 we can buy. But you right the salaries are same. It means despite of the goals of this government (though just in speech) the gap become bigger.
When i discussed about this difference between iran and australia by my friends,almost all of them were uninformed and could'nt belive it.Peoples in iran are so isolated from world that it is strnage for them.This ignorance is ideal situation for the goverment to prevent peoples to seek better life.
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