Thursday, December 18, 2008

Exotic license plates and income distribution

I had never seen a Vanuatu license plate. So, when I saw this car in the UN parking in Geneva I had to take a picture (click on the picture to enlarge).
If you want some populist numbers, this S class Mercedes (who is likely to belong to a diplomat from Vanuatu) is worth about $100,000. The total GDP of Vanuatu is $310 million, divided by a population of 240,000, you get a GDP per capita (not PPP adjusted, but you don't buy the Mercedes using PPP dollars) of about $1300.

Assume that the owner of the car is indeed a diplomat and that he/she spent 50% of his/her annual income to buy the car. Also assume that Vanuatu has 50 diplomats of the same level of the owner of the car. You get that these 50 diplomats collect wages equal to 3% of the country's GDP and 13% of total government expenditure!

If you want to know more about long series of assumptions that lead to resonable guesses, check out the meaning of Fermi Problem (yah yah yah, the name of my high school was Enrico Fermi)
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