Benchmarking Our Insanely Cheap Juice

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Turns out that the Economist Intelligence Unit has been doing research similar to my little "View from Your Electric Bill" feature for a long time, and a good deal more professionally than I have. Using the EIU 2010 Worldwide Cost of Living Survey, you can index a cities’ cost of living along a range of different spending categories to the level in any other city. In this chart, the cost of each item in Caracas is set to 100, to make it easy to compare it with the cost in neighboring cities.

As you can see, with the rare exception here and there (personal care in Rio, for instance) – Caracas is the most expensive city in the sample for everything – except utilities! (Unfortunately, the EIU study doesn’t discriminate between electricity and other utility bills.)

So, if you’re buying Alcohol, the cost in Mexico city is just over half of the cost in Caracas (52%.) In Rio you pay 58% of what you would pay in Caracas. In Panama City, just 41%. If it’s food you want, what costs 100 in Caracas costs 60 in Bogota, 44 in Quito, 58 in Rio. 

Only when it comes to Utilities does Caracas look like a bargain. The same utilities bill that costs 100 in Caracas costs 201 in Mexico City, 226 in Panama, and 265 in Bogotá! (The exception here is Quito, where utilities are even less expensive than in the Doncella del Guaraira Repano). 

The important thing to notice here is that, by regional standards, the relative cost of utilities is extremely low in Caracas. With everything else costing substantially more than the regional average, but utilities substantially less, the weight of utility bills in the average Caraqueño household’s finances is exceptionally low. (And that’s those households who pay for their utilities in the first place.)

Which is the only possible outcome when you hold the cost of one good constant, in nominal terms, while inflation is dramatically raising the cost of everything else…

[Hat tip: you know who you are…thanks!]

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