So I’ve been thinking, you know, the academic sort of thinking, about how much everything costs down here. On average, things are cheaper, because people make less money so the companies can’t charge as much. But some things are bafflingly higher or lower than average. I’m trying to find a pattern or make sense of it all, but so far no luck. Maybe you guys can help?
Given that $1 Canadian is roughly equivalent to 2.5 Peruvian Soles (S/.), I have found the following:
Average costs:
- Hamburger from a fast food joint – S/. 5, or S./ 10 for a combo
- Clothing – S/. 10 for a basic shirt. I just got a new sweatshirt for S/. 23
- Movie ticket – S/.17 for admission, half that on Tuesdays
- Taxi – around S/. 1 per minute
Cheaper than average:
- Bus (long distance) – closer to S/. 5 per hour – this is because few people have cars and there is no train option
- Bus (public transit) – S/. 1 to ride, slightly more if you want to ride for more than 30 mins – see above
- International calls – S/. 5 per 30 minutes – I have figured this one out. In Canada, many people who travel or do business overseas are very wealthy and the phone companies can get away with charging so much. Often in Latin America one family member might go to a richer country to earn money to send home to their family, who might be living in poverty. These are called “remittances” and sometimes comprise up to a third of a country’s GDP. The family doesn’t have the money to pay for expensive long distance calls.
- Cell phones – all prepaid minutes, something like S/. 20 per month – although it is more expensive to call cell phones long distance – Why are they cheap? Because there isn’t the infrastructure for everyone to have land lines
- Fresh local fruit – S/. 1 for 1kg of strawberries – Yum.
- Laundry – S/. 3.5 per 1kg, includes hand-wash, dry and fold – cheap labour
- Internet cafes – S/. 2 per hour – see comment about land lines, same applies to home computers and internet connections
More expensive than average:
- Peanut butter – S/. 15 for a small jar – this is easy enough to explain, it’s not commonly part of the Peruvian diet
- Mail – S/. 100 per kilogram – I don’t understand this one
- Pay phones
- Anything imported – at the movie theatre they have prices listed for candy: S/. 1 for Peruvian chocolate or S/. 4 for imported
Adventures in Peruvia 
Let us discuss the concept of “Supply & Demand.”
Public transit, fresh strawberries, cell phones, internet cafes in a land where computers are not in every house: High demand + high supply = Low cost.
Peanut Butter, land lines for phones, mail, imported chocolate: Low demand + low supply = High cost.
Next, let’s discuss the impact of labour cost. Labour intensive work = low cost. (Laundry).
Your “because people make less money so the companies can’t charge as much” line is inaccurate. High labour costs = high cost of goods, but the people making the high labour cost can afford to buy it. Low labour cost = low cost goods because they’re inexpensive to make. That and the consumer doesn’t have enough money to buy high cost goods. Think of it this way: If everyone made $1,000,000 a year, everything would cost $1,000,000. This is how countries (such as Venezuela in the 1980’s, and Argentina in the 1990’s) get to needing to devalue their currency. Venezuela, for instance, knocked SIX zeros off their bills creating the New Bolivar.
By: Derek Ryder on September 3, 2009
at 6:45 pm