More detail on the Romanian GDP/capita, an answer to Mrs. Vass

Mrs. Vass has published on her blog some data regarding the GDP/ capita adjusted for purchasing power parity. She shows that adjusted for PPS Romanian GDP/capita has increased relative to 2007. This is true. However the picture and story are presented to support a positive story. As usual choosing the right benchmark can do wonders for yours statistics.

Why is Mr. Vass choosing 2007 as benchmark? After all Romania was hit by crisis in October 2008. Also, 2008 was the best performing year in the last decade. To me 2008 has more characteristics as a benchmark than 2007.  Are numbers looking differently if we change the benchmark? Well, just have a look.

Before diving into the data tt is worth, also to check out the improvement of GDP/capita for all the other countries on the picture presented by Mrs. Vass. Almost all use 2004 as a benchmark, except for Romania and Bulgaria. In my view the different benchmarks makes the analysis difficult to understand.

But I digress. Here is the GDP/capita adjusted for PPP from Eurostat. EU27 =100

EU 27

Romania (percentage of EU 27)

2007

100

42

2008

100

47

2009

100

46

2010

100

45

I hope you can see now where the improvement versus 2007 comes from in the data presented by Mrs. Vass. There is a great jump from 2007 to 2008 for Romanian GDP/capita as percentage of EU-27 GDP. But after that the percentage has fallen every year.

But let’s put this into numbers using Mrs. Vass calculations.

EU 27 (euro)

Romania (euro)

2007

25000

10500

2008

25000

11750

2009

23500

10810

2010

24400

10980

Well, how does it look now? Yes there is a minor improvement versus 2007 but not as impressive as the improvement in EU-27 from 2009 to 2010. As expected the numbers in 2010 for Romania look worse than those for 2008.

I hope the story is a bit clearer now, for Romania at least.

10 thoughts on “More detail on the Romanian GDP/capita, an answer to Mrs. Vass

  1. Alegerea anului 2007 ca an de referinta are o explicatie. Este anul aderarii Romaniei la UE. De altfel, si pentru celelate state europene care apar in graficul dnei Vass “benchmark-ul” este anul 2004, anul in care au aderat.

    Afirmatia dnei. Vass “deciziile macroeconomice în gestionarea crizei economice au fost corecte în România” este valabila numai in masura in care se analizeaza 2009 comparativ cu 2010 (crestere de 1,57 %). Dar si aici deciziile “mai” corecte tot la ei sunt – crestere de 3,82% in aceeasi perioada.

    Semnalez si o mica greseala in text: “To me 2008 has more characteristics as a benchmark than 2007”, si nu 2008 cum apare in text.

    Toate cele bune!

    1. @Gioni
      There is something to be said then about the benchmark choice. But what is the point of the comparison then? Romania has only 4 years of observations.
      You rightly point out the growth rate differences, I was to lazy to write about that also.
      Thanks for heads-up on the typo. I always believed my readers are smarter than me.

      1. Ma gandesc ca, folosind an de referinta 2007, poate concluzia corecta a postarii dnei Vass trebuia sa fie legata de beneficiile integrarii si nu despre deciziile guvernamentale privind criza economica.

        Toate cele bune!

  2. Am si eu o mica intrebare. Din cate am observat, doamna Paul a pus una langa alta doua statistici total diferite. Ma insel?

    In prima vorbeste despre PIB/capita la preturi curente (http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_gdp_c&lang=en) unde si Romania A SCAZUT, in ton cu celelalte tari europene de la 5.800 EUR in 2007 la 5.700 EUR in 2010.

    In a doua vorbeste de PIB PPS in care am avut o crestere “modesta” dupa o scadere mult mai mare (cum ai punctat in articolul tau).

    Mie imi pare un articol facut conform celor mai bune indicatii in manipulare. Putea la fel de bine sa spuna: “a crescut puterea de cumparare in Romania in timp ce in Europa a scazut numarul angajatilor in salubrizare”

    Dupa cum spuneam, poate ma insel (la urma urmei numai economist nu sunt). Cunoscand insa autorul articolului tind sa cred ca nu. Poate clarificati voi situatia.

  3. Nu stiu exact ce vrea sa arate articolul Doamnei Vass. Eu am vrut sa arat doua lucruri:
    1) cat de usor este sa “omiti” informatie
    2) imaginea clara a GDP/capita ajustat cu PPS iar cititorii pot sa interprezete singuri informatia.

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