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Who wants to be a billionaire?

How do we measure a nations wealth?

This lesson introduces students to the idea that there is more than one way of measuring average levels of wealth; and that a wealthy nation can still have poor citizens (especially when billionaires skew the statistics). Student will recognise that wealth exists at different scales (people, regions and nations). Students will learn about some of the different indicators of wealth that exist and appreciate that the ranking of data is an important geographical enquiry skill as well as identify problems associated with data collection.

Key questions:

  • When is “average” not the same as “typical”?
  • What is PPP? (see below)
  • Can wealth data be trusted

Key concepts:
Scale

When is “average” not the same as “typical”?
Taking the mean ‘average’ of wealth in a group of people or population can sometimes be misleading as the few very wealthy people (like billionaires) can skew averages upwards despite the ‘typical’ level of wealth of the population being very low.

What is PPP?
Purchasing Power Parity. This is a comparative measure of the cost of goods in different countries. It is often applied to a ‘basket of goods’. The basket of goods contains a group of basic goods and services that are needed, and the comparison is often made between the numbers of hours needed to work to make enough income to buy this ‘basket of goods’ in different countries. It is arguable more useful when comparing differences in wealth between nations because PPP takes into account the relative cost of living and the inflation rates of the countries, rather then just exchange rates which may distort the real differences in income. If we look at a list (1) average income and (2) average PPP data for ten countries they do not show a perfect match because prices of goods differ between nations, as well as incomes.

Can wealth data be trusted?
When looking at these sorts of data with students it important to discuss reasons why the data may not be fully trustworthy. It may be inaccurate, out-of-date, currencies fluctuate for conversion, they may ignore informal/illegal/subsistence wealth, or the issue of averaging (which was introduced by the starter activity). Some may think to extend this idea to recognise that there are also regional or city-wide differences in wealth levels – so, once again, mathematical averages are seen to be not especially “trustworthy”.

 

Click on an activity:
Starter
Main activity
Plenary

Downloads: 

How much is that? 

Rank GDP vs PPP

List of Big Mac prices


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