How do you compare "wealth"?

The typical comparison of wealth for two people living under the same general conditions is usually determined by their net worth--how much greater (or lesser) their assets are than their liabilities. But, this isn't particularly a useful number for two people living in, say, San Francisco vs. rural Nebraska. The model breaks down completely when we look at people in different countries.

GNP or any of the other typical numbers is not that useful for looking at how well a country is "really doing". That is, a high GNP could mean there are some very rich people or it could just mean it is an expensive place to live.

I'm not trying to create an academic exercise here. I feel the current standards of comparison significantly distort what is a real gain for people and I would like to find something that would be useful. A friend (and NicaLiving participant) said that some people use the cost of a McDonald's hamburger. He doesn't as that is not on his list of useful things but he suggested the value of a chicken. That quickly breaks down when you want to compare a vegetarian culture, for example.

Now, what's wrong with a dollar or something more stable such as a Euro? That may be useful if what you need to know is how much to save to buy a BMW but it does little for a society that doesn't buy BMWs. It seems to me that going back to a necessity--food is a good example, is a better starting point. Sure, people don't just need or want food but everyone does eat.

This still leaves two problems: not everyone eats the same thing (for lots of reasons) and, for some, the "cost" of what they eat is insignificant compared to their total expenses. I am going to try to address the first point. The second is more complicated and likely requires a model that includes more than the cost of food.

Let's say, for a minute, that we select "a decent meal" as our basic unit. By "decent" I mean of a reasonable caloric value, healthy in terms of ingredients and typical for the the people of the particular area. This likely means beans and rice with some veggies and possibly an egg or cheese for someone living in Estelí. It might mean a steak and potatoes for someone who lives in Texas. A Japanese person living in San Francisco would pick something very different than an Italian in the same city.

I think that is fine. If someone wanted to eat sushi in Estelí it would be far from typical. That sushi meal would likely cost more dollars in Estelí (if you could find it) than it would in San Francisco. But, beans and rice would cost more in San Francisco than in Estelí.

Taking that a little further, someone who grew their own food, whether it be in Nebraska or Nicaragua, would likely have a lower food cost than someone living in a city where the food had to be brought in. That's ok too. The trick is to find the average cost for the area of interest. If it was Nicaragua, for example, and meals cost more in Managua than in the rural regions (which they certainly will) then this model would show that Nicaraguans would be "richer" for less Euros if they did not move to the city.

This is my initial thinking. Maybe the answer is already out there. If so, point us at it. If not, what do you think?