David Stern's Blog on Energy, the Environment, Economics, and the Science of Science
Thursday, October 7, 2010
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I'm finally back from my trip to Europe (mainly work) and Asia (mainly family visit/vacation). As an Australian the only country we visited that seemed expensive overall was Denmark. Sweden no longer seems to be a terribly expensive country as it once seemed to be. The Big Mac index doesn't agree though. Thailand, our last stop, is of course way cheap but I noticed that drinks in Starbucks don't cost much less than in the US. In general restaurant meals ranged from 1/6 (foodcourt in cheap mall) to 1/3 (waiter service restaurant but some are also more like 1/5-1/4 the price) of Australian prices for the same quality of service. Blogging might continue to be sparse until I am fully up to speed here again. The downside of going on vacation in careers like academia is that the work doesn't go away, it just piles up for you for when you get back.
Maybe a Starbucks index would be better than either the Big Mac or the iPod. It is probably more equal.
ReplyDeleteStarbucks prices in China are also close to those in the US. I guess Starbucks can still charge a local premium for being a foreign product while MacDonald's can't. The idea is to try to measure the difference in the true cost of living across countries. The purchasing power parity price index that is relevant for different income groups will vary a lot. So for poor people in Thailand prices are way low by the standards of foreign countries but things like cars and plane flights are very expensive in local terms. The same is true of Israel. Grocery prices are pretty reasonable by Australian standards and falafel etc. is cheap. But cars are more expensive than Australia. Any single good like Big Macs, Starbucks, or iPods won't be a perfect or even a good measure of the average differences in prices across countries.
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