September 8, 2002

THE BRITISH BLOGGER BASH last night featured gorgeous women and lots of booze. But, naturally, they were talking about InstaPundit and the Swedish economy. Ben Sheriff sends these observations gleaned from conversation:

Glenn, one of the outcomes from the British Blogger’s Bash was this thought on relative poverty measures. If you still care about Sweden, then the EU defining most of their population as being poor is probably a cause for concern.

“One of the factoids that has been raised is that the US median income is $40,000, relative to $27,000 in Sweden. Some of his antagonists have been trying to shift the debate from income levels to poverty rates. So, let’s take them at their word.

The EU apparently; defines poverty in relative terms as “50% of the median income. (The median comes half-way up the income distribution).” So, the US poverty line, on this definition, is $20,000. Or, 187,300 Swedish Kroner (per the Universal Currency Converter).

The most recent (maybe), and easy to find (says google), graphing of the Swedish income distribution is the first graph on this PDF document

As you can see, plenty of Swedes earn over 187,300. Admittedly, these numbers are from 1998, but out of date stats are a perennial irritant in this kind of thing. Let’s just wave that away. Because the interesting thing is that there are huge numbers of Swedes who, if they lived in the US, would be defined by the EU as living in poverty.

Looking at the graphs, I’d say that 60-70% of Swedish women are poor Americans, and that about 40-50% of Swedish men are. The graph doesn’t carry the information cleanly enough for a straight comparison, but I think Sweden should be concerned…

Of course, this mostly shows up the flaws in relative measures of poverty. The counter-example I thought up last night at the Blogger Bash was that of Bill Gates – what happens to a countries poverty level if Bill Gates moves there?

If you use median incomes, not much. But if you use some measure based around a mean, quite odd things happen. According the Bill Gates Net Worth Page, Bill has “earnt” $1.79 billion per year since 1986.

Lichtenstein has a population of 32,000 and a GDP (in purchasing power parity) of $713m. If Bill moves to Lichtenstein, GDP per capita goes from $22,281 to $78,219. In other words, the vast majority of the Lichtenstein population will now be poor on a measure such as “a third mean income” or some such.

Of course, this is a small country. But anywhere with a population of one million and a GDP per head of $1,789 or less will get you the same results (in those countries, GDP per head will more than double). The lesson? Get Bill Gates to leave your country before he does any more harm. What advantages could there be to having him there?”

Chortle. I’m just amazed that he could concentrate on this kind of stuff in the presence of the lovely Claire Berlinski, especially as she appears to have been wearing a see-through blouse.

UPDATE: Ms. Berlinski emails: “The garment in question was neither a blouse nor transparent. Tight, I will concede.”

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