PPPractically Free

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Several of you have written in over the last few days to complain that The View from Your Electric Bill is a somewhat misleading blog feature. Obviously, the cost of living varies tremendously between, say, Stockholm and Quito, so just a cent-for-cent cost comparison doesn’t tell us much about the relative affordability of electric consumption, which is the more relevant metric. 

The criticism is right on. But while several of you wrote to complain about it, only one of you put in the time to run down the numbers so we could do a proper comparison on a Purchasing Power Parity basis. (PPP, by the way, is a standard technique in economics for comparing the affordability of goods across different economies, see also: Big Mac Index.)

As it turns out, on a PPP basis, Caracas has the lowest cost of residential electricity out of the 13 bills I’ve gotten so far – lower, even, than Buenos Aires’.

And a big hat tip to JISV for running down the PPP data.

I really love it when readers take it upon themselves to be more than passive consumers of the blog and take the time to contribute to the analysis. That’s what blogging should be all about! So yeah, you made my day…

Update: Just by way of disclaimer,  I really should add that the sample here is not at all scientific. Just the opposite, it’s self-selected: I’m just including the bills y’all chose to send me! My Bogota biller writes in to note that under Colombia’s complex, graded subsidy system, the poorer you are the less you pay (imagine that!) so that his relatively expensive bill just reflects the fact that his subsidy isn’t as aggressive as poorer people’s. (Though he, too, gets one.) 

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