Tuesday, January 30, 2007

iPods & Big Macs

CRRC Blog has very interesting post about iPods and Big Macs as a comparative tool to measure purchasing power and currency valuation in South Caucasus. Blog refers to Economist and Marginal Revolution Blog (Big Mac case) and Australian Bank (iPod case).
CRRC compares prices of iPods in the region and argues that they are not as low, as it schould be expected since iPods sell for much more than their production costs.

2 GB iPod Nano:
Armenia, 288 US dollars
Georgia, 224 US dollars
Azerbaijan, 199 US dollars

CRRC Blog gives various possible explanations for such price differences:
1. Azerbaijan may have a larger local customer base, allowing them to charge less for the individual item.
2. Armenia may have higher transport costs, or simply a dealer that can keep a very straight face. It is also possible that many Armenian customers actually shop abroad, and those that are left locally are prepared to pay the premium.

No suggestions are given for georgian case though.

1 comment:

Dv0rsky said...

Very funny thing is this BigMac and iPod index :)

The georgian case does not need an explanation: the taxes are unfortunatelly too high, which is the reason for such a high price...