Economics of a First World country
I was just talking to my brother last week about his honeymoon to United States. He spent two week traveling from Los Angeles, to Las Vegas and San Francisco. He had a really enjoyable trip and the highlight of it was the shopping.
Shopping? During the two weeks, my brother and sister-in-law spent a total of $6,000 buying tops, bottoms, shoes, bags, watches and vitamins! Simply because it was so bloody cheap. I was quite astonished to hear that these items were easily 40% cheaper than Singapore.
I always had the perception that people only shop in less developed countries because things are much cheaper there. I mean we go to Thailand, Vietnam and even China to buy cheap ‘branded’ goods.
It didn’t occur to me that in developed countries, what is luxury goods to us may be a normal good to them hence the seemingly affordable prices. My brother was also fortunate to have very favorable exchange rates as well.
This made me think. In less developed countries, some things may be more expensive especially those that require huge investments in infrastructure and technology such as telecommunication and broadband networks. But generally standard of living is pretty low, probably because locals don’t earn much either.
On the other hand, you have the very developed economies where luxury goods such as electronics and branded apparels are apparently normal goods and priced as such. So while certain things are more expensive such as food and public transport, it evens out.
That makes me wonder about an economy like Singapore, which isn’t as mature as US and not emerging like Thailand or Vietnam. It seems like we have neither cheap food nor cheap branded goods. Perhaps that’s why Singapore is a considered a costly city to live in from both sides of the world.
Isn’t this a great opportunity for business-minded people? Or is this too shallow of an analysis?