Is poverty in the eye of the beholder?

Incidentally, there's a pretty interesting discussion in the comment thread of Tyler Cowen's Cuba post at Marginal Revolution. Tyler says:

A simple checklist would start with the question of whether an apologist has visited both the Dominican Republic and Cuba. And a non-communist Cuba could have done much better than the DR. It is a fascinating place for visitors, but right now the quality of life in Cuba isn't close to that of the DR or for that matter Honduras, the second-biggest Latino mess in the hemisphere. While we're at it, let's not forget northern Mexico or even central Mexico. It's time to stop apologizing for communist dictatorships; are you really so taken with the idea of confiscating property as to overlook decades of tyranny, impoverishment, and human misery? Yes I am familiar with the UN social indicators; I say you need to visit each of these countries, preferably speaking Spanish, and then report back to me.

A couple of commenters claim that they have visited Cuba, and it looks a lot better than Northern Mexico. It's pretty unambiguously clear to economists that quality of life is higher in Northern Mexico, which is the richest part of a country that has a per-capita GDP three times higher than that of Cuba. So why the difference?


1) Sample error: they visited the nicest parts of Cuba, and the nastiest part of northern Mexico.

2) The economists are wrong: per-capita GDP is missing important components of quality of life; a more egalitarian distribution of a little income makes people, on average, better off than a much higher GDP unequally distributed.

3) Deep poverty is much more picturesque than moderate poverty. Poor countries have their old colonial buildings still standing, because no one had the money (or the reason) to tear them down and put up something bigger. The countryside is dotted with adorable houses made out of natural materials and natives wearing colorful traditional garb. Animals graze in verdant fields, besides teams of sowers and reapers. Middle income countries are smoggy, and almost everything looks like a cheaper, shabbier version of what you get in the US. Scenic landscapes are despoiled by cinderblock buildings with hideous tin roofs, or trailers; cities are choked with boxy modern buildings that look something like our housing projects. The genteel decay that looks gothic and intriguing on an old Victorian mansion just looks seedy when it's eating away at badly poured concrete. Affluent Americans underestimate the utility value of things like having personal space, or an automobile.

4) Cuba was relatively wealthy in 1959; it therefore has more of the markers, like old majestic buildings, that we associate with wealth.

Obviously, 2 is true to some degree, but not enough to explain why you would think Cuba is better off than northern Mexico. Northern Mexico could be a lot more unequal than Cuba and still provide a better standard of living to its citizenry. Especially since a lot of big improvements in third world poverty come not from transfer payments, but from fixed infrastructure like electricity, sanitation, and decent roads; higher per-capita GDP simply provides more of those things. I'd put a lot of emphasis on 4, and especially 3; I have no idea what role 1 might play.