Comparing Barcelona with the US.
7. Food is insanely cheap, about 2 euros for a dozen eggs vs. $3.50 in the US, 1 euro for three large baguettes, Kentucky bourbon for $7 vs. $30 in the US, $12 for a bottle of Stoly vodka, vs. $25 in the US., etc.
Booze prices, that’s just tax, obviously. But Lord Knows which bourbon is only $7 in Spain. Baguettes – judging from the P experience – well, depends exactly what type. Eggs, those look about right. Even a little expensive in Spain in fact.
But that brings us to something that might have switched. Which is that food in the US has been cheaper than in Europe. So much so that it’s been a stylised fact. It’s been used in some PPP calculations of relative living costs for example. Food is cheaper in the US (Tim Smeeding used it to balance how health care is more expensive for example and he was using Luxembourg Income Study numbers, the gold standard of the field) than in Europe.
Now, if that’s no longer true then that’s a big, big, shift. When and why?