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The true value of money
https://forum.costaricaticas.com/viewtopic.php?f=1&t=30926		 Page 1 of 2
Author:  James [ Sat Oct 10, 2009 12:26 am ]
Post subject:  The true value of money
The true value of money
When tourist from industrialized countries travel to lesser developed countries they invariably over pay for everything. The reason for this is that one tends to compare the cost of goods and services to the cost for these goods and services back home which really has nothing to do with what things should costs locally. It is important to not over pay because it creates inflation that makes it difficult for the local people to buy these goods and services. Why should the vender continue to sell an item for one or two dollars when he can get ten times that amount from a tourist.. It makes the local populace resentful and places the foreigner in economic as well as personal danger. He becomes a target as well as other foreigner that will come along after him. He appears stupid and an easy mark. Most people have no problem determining if they are being overcharged back in your home country. If the neighbor boy wants to mow your small front yard for $300.00 you know that is too much. On my first job back in the US in the late 60s I was making 75 cents per hour and I could live on that because costs were relatively lower. People in Costa Rica make about $1.00 and hour and can live on that if they completely avoid activities where tourist go. Some time ago I set out to devise a method to determine the dearness of money in another country. How much is that money really worth in that economy in buying locally produce goods and services. One method is to compare the hourly rate charged by lawyers with the hourly rate charged by lawyers back home. Lawyers in my area in the US charge around $250.00 per hour and lawyers in some central American countries charge about $25.00 per hour. Lawyers in both places have to have the same education and do the same work in the same environment. They both live equal middle class lifestyles. So using that method. The dollar has bout ten time the value. This is not exactly right but it is not too much off. A better method is to use the Gross National Income for various countries and to divide it into the Gross National Income of ones home country to derive a factor that can be used to find the dearness of money and what the item or service is costing in the eyes of the local people. In 2007 The GNI of the US was 46,040 and that of Mexico was 8,340 there for dividing 46,040 by 8,340 gives a factor of 5.52. If you buy goods and services in Mexico you should multiply the cost by 5.52 to find out what it is rely worth. That is the reason that workers from Mexico can come to the US and work for minimum wage and be able to support an extended family back home. Instead of making $7.00 per hour they are really (7.00 x 5.52) making $38.64 per hour in worth back home. The factor for Costa Rica (46,040 / 5,560) =8.2 . That two dollar taxi ride is now $16.56. The Thailand factor is 13.5 so that traditional Thai massage that is $5.71 is really $77.14 which is reasonable and what I would expect to pay back home. The extras are overpriced. In Vietnam no one will give you their price for things because at a factor of 58 any price that you offer will be beyond their wildest dreams. That custom made suit that is $50.00 would be $3,380
Author:  Ilv4play [ Sat Oct 10, 2009 12:38 am ]
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Holy Crap Batman....... That actually makes sense..... Now if only it was that easy to learn spanish.
Author:  JazzboCR [ Sat Oct 10, 2009 10:59 am ]
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An excellent explanation of a complex subject. A further distortion is the introduction of foreign practices into a local economy, the prime exemplar being tipping. No, I'm not looking to reopen that contentious debate, but isn't it true that the practice hardly existed in CR before the influx of tourists?
Author:  MrLasVegas [ Sat Oct 10, 2009 9:50 pm ]
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Excellent analysis.Do you teach economics? Everybody should keep this in mind.However, the cat is out of the bag.We do pay more as foreigners, but we get more as well.Go to a mp primarily frequented by working class ticos.Then compare with HLH,Idem, etc.The quality difference is light years ahead.
Author:  Dean [ Sat Oct 10, 2009 11:18 pm ]
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So, a girl at the HDR asking cien is actually receiving $800 for the hour. Seems to be $300 in the US for the same service. This actually makes chica pricing quite interesting. Thanks for the analysis, it makes sense to me.

Dean
Author:  Del Rey Dave [ Sat Oct 10, 2009 11:34 pm ]
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Very nicely done. Great tool to use if you are thinking of or already living abroad as well.
Author:  Express321 [ Sun Oct 11, 2009 12:39 am ]
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Dean wrote:
So, a girl at the HDR asking cien is actually receiving $800 for the hour. Seems to be $300 in the US for the same service. This actually makes chica pricing quite interesting. Dean


There are no doubt big differences in monetary values. That`s why the local press refers to places like New Fastasy with the $45 an hour girls as "upscale." This is also why no one should feel bad about paying a Del Rey chica $50. That`s a very nice payday.
Author:  Berk2302 [ Sun Oct 11, 2009 11:43 am ]
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Where is the discussion of "the market". While such as expose on the "value" of the dollar is interesting one must consider the "market" and what the "market" will bear when it comes to the "price" of fun in the HDR.

We have had this discussion multiple times. A barrel of oil is pretty much worthless to some native living in the jungle of Brazil wearing a loin cloth and hunting daily to feed his flock of wives and K*ds. On the other hand, a hot Colombiana in the HDR can garner 100 bucks plus for her services. Yea, a 100 bucks is a wad of cash in Colombia or CR. So what. It's all about the market.

Berk.....
Author:  JazzboCR [ Sun Oct 11, 2009 12:19 pm ]
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Berk2302 mentions another dimension to the discussion of the value of money--context or as he says, "the market". While his example of the jungle native is good, and an intermediary value is the 3 whores in town on a miner's payday,the classic example is, What is the value of the last seat on a lifeboat leaving a sinking ship? Then the context shifts to power and morality, not merely coin of the realm.
Author:  Express321 [ Sun Oct 11, 2009 9:02 pm ]
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Berk2302 wrote:
On the other hand, a hot Colombiana in the HDR can garner 100 bucks plus for her services. Yea, a 100 bucks is a wad of cash in Colombia or CR. So what. It's all about the market. Berk.....


Very true and the Del Rey is often full of guys thinking in terms of the U.S. price structure and will pay the 100 in the drop of a hat. That`s the mindset of the demand side. But the limits of this "market" should really be stretched more with 150, 200, even 300 dollar asking prices for the lookers, and propinas for uncovered BJs, etc. In fact such was already in process before the global economic crisis but is now scaled back.
Author:  Express321 [ Sun Oct 11, 2009 9:21 pm ]
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JazzboCR wrote:
What is the value of the last seat on a lifeboat leaving a sinking ship? Then the context shifts to power and morality, not merely coin of the realm.


True but how is this relevent? Since when is a shapely w/ bolt ons Latina sex worker in Central America of the rarity and demand value as the last seat on a life boat? :lol: Bottom line is that plenty of Johns will hop on planes and show up at the Del Rey spending money about the same way they do in the U.S. With that in mind the better looking chicas might as well ask for 150 or so but take less depending on how many other good prospects they eye in the crowd.
Author:  Express321 [ Sun Oct 11, 2009 9:37 pm ]
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MrLasVegas wrote:
We do pay more as foreigners, but we get more as well.Go to a mp primarily frequented by working class ticos.Then compare with HLH,Idem, etc.The quality difference is light years ahead.


Not always. I have had some real duds at places like NF and some diamonds in the rough at some lower end places. In fact many here report seeing girls from the low end massage places working the Del Rey at night after work. Paying more does not always get you more, but many making good bucks off the gringo tourists would love for you to think that... :lol:
Author:  Cujo's [ Sun Oct 11, 2009 10:47 pm ]
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I wonder if the chicas think about business as much as you guys do.... :|


Cujo
Author:  Boynton [ Sun Oct 11, 2009 11:04 pm ]
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.
Author:  Express321 [ Sun Oct 11, 2009 11:06 pm ]
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Cujo'S wrote:
I wonder if the chicas think about business as much as you guys do.... :|


Cujo


:lol: Probably not much beyond the "100 dollars. It`s nothing to you" or 120, 150, 200, fill in the blank. They think it`s small change to all of us and for some it is so they just go ahead and pay it without regard to the disparities between the US and CR economies even if they are aware of them at all. And of course a few thousand colones for cab fair is also "nothing to us" so they ask with the surest expectation...
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