For example you mention cars. The almost identical VW Golf (know as a Rabbit in the US) cost more than twice as much in Denmark as in the US.

http://www.numbeo.com/cost-of-living/compare_countries_resul...

Yes, but the VW Golf is relevant in the U.S., and irrelevant in Denmark. In the U.S. you have to drive, and in Denmark you don't (and most people don't). The modal share of bicycle commuting in Copenhagen is >50%, because the bike infrastructure is good. I sold my car when I moved from the SF Bay Area to Copenhagen, and now I spend less on transportation, with a better quality of commute (in my subjective estimation). Yet PPP would probably claim transportation costs more! Besides the nice bike infrastructure, I have an unlimited-rides metro pass for $50/mo, which includes very good 24/7 service. How much would it cost me to buy 24/7 transportation in the SF Bay Area, where I don't have to drive the vehicle myself? (Night buses that come once an hour don't count.)

I would rather work for 10 months in NY and live in Maui for 2months vacation than spend $15000 traveling to Maui five times for a week each, but GDP says the latter is a higher standard of living.

Sort of like your doctor wanting to know your blood pressure for somethings and your weight for others. They can both tell say something about your risk of heart attack but blood pressure also indicates other more immediate issues and your weight is vital when prescribing medication.

EX: Subtracting exports and adding imports is useful when tracking quality of life adding exports and subtracting imports is useful when measuring economic strength. However, the difference between exports and imports tends to make up a small fraction of the economy so it's not that important.

Better might be to ask Danes and Americans "are you happy with your life?"

On one happiness scale, Danes are the happiest people in the world. http://unsdsn.org/files/2013/09/WorldHappinessReport2013_onl... . The US is #17.

GDP per capita includes everything produced by the country including health care, child care, etc. So that is not the issue here.[2]

In the US only about a quarter of GDP is spent by the government while in Denmark about half is spent by the government.[3] So in the US we pay directly for some services like healthcare that in Denmark are paid through the government with taxes.

[1] http://mruniversity.com/courses/development-economics/gdp-an...

[2] http://en.wikipedia.org/wiki/Gross_domestic_product

[3] http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu...

PPP is difficult because there is no international common basket of goods. Danes get 52 weeks of paid parental leave, of which 18 are to be taken by the mother, 2 weeks by the father, and the others split at the parent think is appropriate, and their job position is waiting for them when they return.

What's the equivalent for the US?

Some of the leave pay comes from the company. Some from the state.

How does the 1 year of overall leave measured in the PPP? How much would it cost to get the same benefits in the US?

I'm not expert in the details of either GDP or PPP calculations but here is my understanding of how parental leave would be treated. It would show up in GDP because wages are included under the "income approach", one of the three main approaches used. I don't believe it would directly show up in PPP as it is not a good or service that people buy. I don't think is means anything to say parental leave is less or more expensive.

Anyway I don't think it would have a big impact as there only about 50,000 births every year in Denmark in a population of 5.5 million. So if they max out the benefit it is only 25,000/5,500,000 = 0.45%. This is a good example why GDP and PPP work in practice - all these random errors tend to cancel out.

If you are interested I suggest you read up on how GDP is calculated. The Wikipedia article if pretty good[2].

[1] http://www.numbeo.com/cost-of-living/compare_countries_resul...

[2] http://en.wikipedia.org/wiki/Gross_domestic_product

How did 50,000 births turn to 25,000 in the numerator? There's 1 year of leave, so that's 50,000, no?

I get 50,000/4,500,000 => 1.1% . Still relatively small, yes.

I noticed a few things about the [1] you mentioned. It's mostly meant for 20-somethings. That is, it doesn't compare health care costs, daycare costs, etc. which older people and parents would be interested in.

Also, there's a deliberate social policy behind why the Volkswagen Golf price is so high Denmark. Quoting from http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-... :

> this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents. For every kilometre driven by car, the Danish state pays out 16 cents.

I've read through the GDP many times before. I still don't have a good grasp on it. It seems that having a poorly insulated house, for example, is better for the GDP because I need to work more in order to pay the higher heating bills. Or having more road damage because of automotive traffic is better because it means more government funding to rebuild the road system. Or it's better to use MS Windows than OpenBSD because the latter doesn't cost anything and so doesn't appear as part of the GDP.

These are listed as 'externalities', but it's these externalities which contribute to happiness, enjoyment of life, etc. So while GDP per capita is used as an approximate measure for the ability to carry these out, it doesn't mean that it's actually being done.

You consume more goods and services. If you want to spend time out of the workforce you can reduce your consumption of goods and services. Most people in the US don't do this because they value consumption more than leisure.

If anything, this cuts against quality of life in Denmark. If a significant number of Danes prefer consumption to leisure then they are harmed by parental leave. They are forced to trade consumption for leisure even though they don't want to. In much the same way, if you forced me to trade my Thinkpad for an equally priced Macbook, I'd be worse off in a manner that is not reflected in GDP.

http://en.wikipedia.org/wiki/Purchasing_power_parity

You need to survey folks who have lived in both places.

Delete your post if you like...