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Comment by Snoupy | Hacker News Reader

imo PPP is misleading. 1 public toilet in the US is nothing like 1 public toilet elsewhere. 1 housing unit in the US is nothing like 1 housing unit in China. Nominal GDPs in USD fluctuate in value because they are real. Countries in EU, Russia or China are suddenly relatively less wealthy after adverse currency move.

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Nominal GDP is a good indicator of quality of consumption whereas GDP PPP is a better indicator for potential of production. If the US worker is used to a home with a lawn, he will still be undercut by a Chinese worker who lives in a 25-storey apartment.

In case of adverse currency move, EU, Russia and China may still produce as much stuff (taken together they produce all of the components, whose effective price unchanged), but their US competitors are all undercut on price. They'll consume a bit less for the duration, though.

One Big Mac in China is nothing like one Big Mac in the US?

Well yes.

It all depends on how it's produced in China and also what's the marketing and the price positioning. It probably can get away with higher price by positioning itself as an exotic brand.

You could ask the same for North Korea, is a Big Mac really the same product over there than in Alabama ?

I don’t think there is a McDonald’s in North Korea but otherwise - yes - a Big Mac is the same all over the world.

Let's agree to disagree even for that specific Big Mac. I think the likelihood of contamination/ food fraud, concealed scandals, etc is higher in China and NK. Simply knowing it prevents me from similarly valuing the Big Mac. In addition, I often enjoy freely joking about the stupidity of local politicians while eating... and could bring up the building standards, codes, AC, open restrooms, reliability of power grid, etc that won't match US standards and impact my experience as a customer. Anecdotal example 1: In July 2014, Shanghai Husi, a Chinese subsidiary of a US-owned food supplier was caught producing substandard meat products. McDonald's was one of its biggest fast-food clients and had been sourcing from the supplier for more than two decades. After cutting ties with Shanghai Husi, McDonald's China and its branches in Hong Kong and Japan were forced to pull many products from the menu due to a severe shortage of meat and vegetable supplies. Just 1 occurrence of them getting caught, imo more likely to occur in countries with widespread corruption and directly impacting the burger consumption experience/consumer peace of mind. Anecdotal example 2: when I eat I like to connect to wifi and freely browse YouTube

The point isn't wether the product is exactly the same. It's wether it's intrinsically worth the same.

You could be paying thousands of dollars to get your Big Mac in PyongYang, so technically it's available there, and PyongYand residents can there be declared as crazy rich on the PPP scale.

Same way if the measure was Toppogi it would be dirt cheap in PyongYang and Seoul but crazy expensive in Guatemala with one single shop offering it as a delicacy.

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