A question from Yahoo! Answers:
Why might the well-being of people in low GDP per capita countries be underestimated?
Because the price level in such a country is likely much lower than it is in high-income countries. When you adjust GDP per capita by price level (or, as economists sometimes put it, by purchasing power parity), it may increase, sometimes several times over. It is not uncommon to see $1,000 GDP per capita turn into $3,000 after adjusting for purchasing power parity. But make no mistake, $3,000 per capita is still very low by the standards of industrialized world…
Also, poor countries often have substantial informal economy, which is not accounted for in national income accounting, so the value it produces is not reflected in GDP figures.