On Oct 10, 12:44 pm, (Rand Simberg)
wrote:
On Wed, 10 Oct 2007 10:32:50 -0500, in a place far, far away, Michael
Ash made the phosphor on my monitor glow in such a
way as to indicate that:

In theory the exchange rates over the long term should match up with
purchasing power parity. In practice, it is an inexact science (just which
basket of goods do you choose?) and there are many other factors which
affect exchange rates. The end result is that the two are not always the
same, sometimes wildly different. In the case of China we can see that
they are different by about a factor of three.

Is that based on the Big Mac index?

Is there a distribution around that average? Sure. Do you have the
figures? Do you? No. Well, I will tell you. It falls off steeply
and its bell shaped. ITs not bimodal as you suggest.

It's not very bell shaped, as I have shown you.

Fact is, half the population make more than $600 per month and half
the population make less.

Let's start with an incorrect assumption!

He doesn't seem to understand the difference between the median and
the mean (a common misconception).

I am quite familiar with the difference between mean median and mode.
That's why I mentioned skewed distributions and bimodal
distributions. Neither of these apply to the figures here.
Purchasing power parity is a way to compare the ability of people in
different nations to buy a basket of goods. This is true. Where you
fail is when you try to say that telephone, television, radio and
internet are not in that basket or cannot be. Which is bull.