– Mississippi has similar GDP per capita ($53061) than Germany ($54291) and the UK ($51075), so why are people in Mississippi so much poorer with a much lower living standard?

Question

I was surprised to learn that poor states like Mississippi have about the same gdp per capita as rich developed countries. How can this be true? Why is there such a different standard of living?

In: Economics

Answer 1

Tagging on to what’s been said, there are also other indicators that try to take into account other factors like education level and life expectancy that have been calculated for both countries and some subnational entities. One of these is HDI or Human Development Index which is at 0.858 for [Mississippi ](https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_Human_Development_Index_score)and 0.950 for [Germany](https://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index#List). Note that there’s also equivalent of such for [German subnational entities](https://en.wikipedia.org/wiki/List_of_German_states_by_Human_Development_Index) and the lowest that gets is 0.921 for Saxony-Halt.

Some of this probably stems from comparatively poor health indicators like obesity and gun violence, but there’s a host of reasons out there.

GDP is also something that takes into account the output of everything in the state including that of corporations, so that’s not the same thing as household income which is also different from wealth.