Hyundai Research Institute has announced in its report "Nominal Income 20,000 (U.S.) Dollars, Standard of Living 30,000 Dollars," that “Korea’s per-capita GDP without considering price levels was 22,778 dollars last year, but its per-capita GDP based on purchasing power amounted to 31,714 dollars.”
Thus, the report notes that because of the lower cost of living in Korea compared to other industrial nations, Korea standard of living is on par with the most developed nations in the world. From my perspective, it seems like the report fails to adequately evaluate the cost of living in Korea.
For example, the report fails to adequately equate for the higher cost placed on families for education and healthcare. Additionally, some of the price comparisons seem to be based on peculiar data-sets. For example, the report notes that clothing and shoes cost 10% less than the OECD average, however, a trip to a retail store may make you think that the report is not considering realities in the larger cities. It is true, that if you ignore the wants of consumers for luxury brands, then, the report may come to valid conclusion, however, the reality seems far from the data.
Is this one of the many reports in Korea that simply started with a conclusion? What do you think?
Sean Hayes, IPG's Co-Chair of the Korea Practice Team, may be contacted at: SeanHayes@ipglegal.com