"Everything is so expensive," complain Panamanians. Recent research intended to compare is that really so, if looking at the countries in the Isthmus.
Purchasing power is essential for determination of the actual cost of a product or service (a cup of coffee in Panama City can cost twice of what it costs in Managua). However, the impact on the pocket of an average person in Panama City would be less of what it is for similar person in Nicaragua, since Panamanian makes three times more money.
The position of each country in the ranking is determined by comparing the cost of basic basket and dividing it by income, or the respective minimum wage. The cheapest country in the region is Panama, where a person with such salary can buy approximately 1.8 basic baskets.
In Costa Rica the same figure would be 1.5 baskets, while Nicaragua would only have with 0.5 baskets.
The measurement has a margin of error, by involving the basic baskets that vary across countries.
Of course, such estimation would have it flaws, since the approach for determination of basic basket varies across countries. Plus such approach doesn’t include such important factors as cost and quality of education, housing etc. Such factors are difficult to compare. Even so, it is safe to say that Panama stands out among neighboring countries not only by real income, but by many other quality of life factors.
