How to make sense of Lebanese currency values in USD with a PPP conversion factor?

Question

For example, I have data from a survey of adult citizens in 2014 showing an average annual salary of about 20000 LCU. I would like to find a comparable measure of the standard of living in Lebanon and other countries around the world, calculated from these surveys of annual income.

Using the private consumption PPP factor here https://data.worldbank.org/indicator/PA.NUS.PRVT.PP?view=map&year=2014

Lebanon's PPP conversion factor is 843.264.

So a Lebanese annual salary of 20000 LCU has the purchasing power in USD equal to

20000/843.264 = 23.71 USD.

How does this result make sense? And perhaps I should not be using PPP but a different exchange rate?

Answer 1

Your data on wages seems to be wrong.

According countryeconomy.com minimum wage in Lebanon was 500,000 per month in local currency unit (LCU) which is Lebanese pounds. So yearly an minimum wage employee should earn 6,000,000.

So it’s impossible that the average salary was 20,000, unless somehow minimum wage laws are grossly violated for large numbers of people, which I find unrealistic.

I wasn’t able to find wage data for Lebanon for 2014, they seem to be impossible to find, but in 2021 the average wages were 61,156,303 per year so approximately 5 million per month. I know Lebanon has some large levels of inflation recently, but I find it highly unlikely that in 2014 yearly Lebanese wage would be 20,000 per year meaning average worker somehow earns 0.33% of minimum yearly wage. That would be mind boggling.

My best guess is that you misread the table and the 20,000 was not 20,000 but probably 20,000,000. Maybe the table was in thousands? So it was 20,000 thousands?

The PPP conversion rate makes sense when applied to the yearly minimum wage. This would give you yearly minimum wage of about \$7115.20 which sounds reasonable for Lebanon.