Why some countries are wealthier than others? 3/6
Third post: GDP composition and relation with GDP per capita
In this second section, we analyse the composition of the GDP per country, and how it relates to the GDP per capita. Looking at each of the GDP chapters, we can see different relations with GDP per capita:
– Firstly, negative correlation between GDP per capita with sector A (-0.58) and G-I (-0.47). Therefore, the least weight of A or G-I in the overall GDP, the higher the GDP per capita. However, chapters A and G-I have a low value in the overall GDP composition.
A is Agriculture, forestry and fishing
G-I is Distributive trade, repairs, transport, accommodation, food services
– Following, neutral correlation between GDP per capita with B-E (-0.22), F (-0.18), J (0.31) and L (0.05).
B-E is Industry, including energy
F is Construction
J is Information and communication
L is Real estate activities
– Finally, positive correlation between GDP per capita with K (0.52), M-N (0.52) and O-Q (0.43). The more weight of K, M-N or O-Q in the overall GDP, the higher the GDP per capita. These chapters are considered as the highest value in the GDP compositions.
K is Financial and insurance activities
M-N is Professional, scientific, technology; administration, support services activities
O-Q is Public administration, compulsory social security, education, human health
However, none of these variables have a high or very high correlation with the composition of GDP per country. Next post in a week…
Notes on the coefficient of correlation:
- Very low: from 0.0 to 0.2
- Low: from 0.2 to 0.4
- Medium: from 0.4 to 0.6
- High: from 0.6 to 0.8
- Very high: from 0.8 to 1.0
file: wealth of countries 3_6
data source: https://data.oecd.org
