FINAL DRAFT Comparing Living Standards across Nations:

this paper is to try to answer this question by presenting estimates of the real purchasing power (PPP) parity-adjusted distribution of disposable income for a number of countries. This is not an easy task, as we will argue below. The major tool for converting (relative) nominal national incomes into real incomes is "purchasing power parities" or PPPs (e.g., OECD 2001). While, these PPPs are designed for aggregate macroeconomic statistics, not for microdata-based measures of disposable income, careful comparisons can yield approximate answers to the questions posed. And, in fact, we find that comparisons of "real" economic wellbeing or "living standards" look very different across countries depending on where in the income distribution one decides to make these comparison