How Overvalued is Italy?
By Bryan Caplan
Whenever economists ask, “Where is the gap between official per capita GDP and actual living standards the greatest?,” I don’t pause. My instant answer is always: Italy. Official stats put its GDP per capita around $30,000. But virtually every part of Italy I’ve seen – North and South, Genoa, Naples, Catania, Como, Milan – seemed not just dilapidated, but backwards. Pit toilets? Verona and the German parts of Tyrolia have been the only exceptions to the rule that I’ve seen with my own eyes. If official stats put per capita GDP at $15,000, that would sound about right.
The main objection I’ve heard to my fault-finding comes from a random Italian American, who told me that Italian homes look vastly better on the inside. I guess it’s possible, but I have to be skeptical.
Nevertheless, I’m returning to Italy next week for a ten-day trip. For all its faults, Italy’s got historical treasures second to none. This time I’ll be in Rome, Umbria, Siena, Florence, Bologna, Padua, and Venice. Will my broader sample make me revise my estimates?