The cost of living

I thought I was done with blogging about our trip to Central America but then I remembered our cost-of-living experiment. I want to share that.

Early on, it struck me that Steve and I would be making lots of comparisons among the four countries we would be visiting (Guatemala, Panama, Costa Rica, and Nicaragua). We expected the costs of traveling in them to vary. But would we get a good sense of how much it costs to live in each? We decided to be Scientific.

Our idea was to create a theoretical “market basket” of common grocery items. We would record the prices starting in Antigua (Guatemala) and later at supermarkets in the three countries to follow, then compare them. Would this give us insight into the daily challenge of keeping a Panamanian household versus a Nicaraguan one? We would see!

We had the most fun the first time we did it. Strolling up and down the aisles of a big supermercado we found near Antigua’s artisanal market, we scanned for essentials of modern living. The selection we came up with was:

  1. Toothpaste
  2. A bar of soap
  3. Toilet paper
  4. Powdered laundry detergent
  5. A can of Coke
  6. A bottle of vodka
  7. Bananas
  8. Kellogg’s cornflakes

Please note I’m NOT saying Steve and I are daily consumers of all those things. (I personally only indulge in Coke on the rarest of occasions.) But they seemed like reasonable representations of stuff folks everywhere buy often. And note that we did not actually buy these items — just wrote down what they cost.

The minute we started recording the prices, it became obvious we needed to be at least somewhat specific if we expected to make comparisons down the road. So we noted that 90 grams of Colgate toothpaste in the Guatemalan store cost 13 quetzals (roughly $1.68). We picked a brand-name bar soap (Dove, 135 grams for 14.5 quetzals/$1.87) and vodka (Skyy, .75 liter for 85.95 quetzals/$11.09), Coke (4.45 quetzals/57 cents for a 354 ml can) and Kellogg’s cornflakes (19 quetzals/$2.45 for a 530-gram box). But we decided to go with generic-looking toilet paper and detergent. Oh yeah, and bananas. How complicated could bananas be?

More than you might think — at least in Central America, where bananas come in multiple incarnations. For our Guatemalan “basket,” we recorded that the price of “criollo” bananas was 1.95 quetzals per pound.

A few days later, when we got to Panama and (eventually) found a large, modern supermarket, we saw that bananas (just one type, thank God) were priced both per pound (45 cents) and per kilo (.99 cents). But the Costa Rican supermercado we later visited in San Juan offered its customers a choice of banana types and, even worse, the prices were per banana. One for 40 colones/6.5 cents or 15 bananas for 350/56 cents) were the prices for the variety we arbitrarily selected. In Granada, Nicaragua, the price was 2.5 cordobas (7 cents) — again per banana.

Other challenges soon were making me feel grateful I don’t make my living collecting data for the Bureau of Labor Statistics and its Consumer Price Index. For example in Panama we found 530-gram boxes of Kellogg’s Cornflakes on the shelf — but ONLY packaged with 67-gram cans of Pringles potato chips! If you hated Pringles but loved your flakes, you were out of luck. Skyy vodka could be swigged all over Guatemala and Panama, but it was absent from the shelves of the Costa Rican and Nicaraguan markets we targeted, so we settled on Smirnoff. That only came in liter (versus three-quarter-liter) bottles, and it was labeled 35% (a lower alcohol content than the 40% of Skyy). While we could price a 354 ml can of Coke in Guatemala, Panama, and Nicaragua, in our Costa Rican market it exclusively came in 600mm plastic bottles.

Despite this jumble, I finally (last week) added up the prices in each “basket” and converted the total to US dollars. I can report that (including their admitted inconsistencies), the Guatemalan basket came to $21.94, the Panamanian to $25.20, the Costa Rican one to $27.42, and the Nicaraguan to $32.76. That shocked us given the fact that Nicaragua is so much poorer than the other three, even Guatemala. But then we realized that the Nicaraguan liter of Smirnoff’s was a whopping $21.86 (compared to $12.54 for the very same bottle in Costa Rica and less for the smaller bottles of Skyy). Subtracting the alcohol put the basket totals more in line with the economic stature of the countries (Guatemala $10.85, Panama $15.70, Costa Rica $14.88, and Nicaragua $10.90).

For me the bottom line is that these numbers aren’t very interesting — certainly not enough to justify the work involved in collecting them. That’s not to say I regret doing it. The whole exercise forced Steve and me to interact with supermarkets in a more focused way than we normally do while traveling. It also probably made me a bit more skeptical of the BLS’s Consumer Price Index (just because I’ve seen how daunting it is to try and make such comparisons.) Still, I have no intention of trying to duplicate our experiment on our next trip that takes us across the borders of many diverse countries. We’re scheduled to depart on that one August 30.

But that’s another story.

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