On coffee and economics

Monday morning. Even when I am not as tired as I am right now, I am a real fan of a good cup of coffee. Although I am young and spent too many years in college, and am thus certifiably poor, I have never really considered my latte expenditures as anything other than a necessity. This week is looking to be no exception, and so I have been pondering the issue of how much more the same iced venti latte costs at UK Starbucks compared with US Starbucks. I have mixed feelings about my regular trips to Starbucks—I know that is a terribly American thing to do and not in line with my desire to acclimate myself to an English existence. However, the charming named-after-a-person coffee house across from my office building does not “do” an iced latte, and the other attempts I have made at even a Euro-chain coffee shop were all immediately discarded because the iced latte was sickeningly sweetened.

Starbucks also has the distinct advantage for a weary laborer, in that there are three sizes (large, bigger and huge) and the venti (“huge”) is about twice the size of any other coffee cup I have seen here. So I will take the guilt and shame that come every time I pass through the door with the big green circle on it, and at least I will be sufficiently caffeinated to make it through another day.

I find the local Brits to be surprisingly preoccupied with money, and more specifically, with how much things cost and how expensive they are. I find this really surprising for a few reasons, the most obvious of which is that in general the prices are not that startling to me. I pay £2.49 (about $5) for a large latte at Starbucks here, which I believe was running me $3.73 in the American Midwest last fall and more like $4.50 on the East Coast. (Note this comparison is getting worse and worse as the dollar has fallen against the pound…) So there is a mark-up there, about 30%, but not doubled—my British colleagues are always saying things cost the same in Dollars and Pounds but I just don’t find that to be true. I don’t have too many comparisons as direct as the coffee one, but I do know that paperback books of the “sex-and-shopping” genre here are £6.99 (about $14) where they were typically $12 in the U.S.

(I note at this stage of my commentary that the Economist has a “Starbucks Tall Latte Index” in addition to their well-developed Big Mac index for documenting purchasing power parity. I am not the first person to make these comparisons and the Starbucks one is actually pretty economically sound as a basis for my argument that follows.)

Another factor makes it difficult for me to compare my own cost of living here vs. the US is the public transport infrastructure of the UK, which I find to be amazing. Although funnily enough, this is another thing that I find the Brits complain about a lot, both in terms of the expense and the reliability (neither of which I have found to be as bad as I would have expected given the amount of commentary I have heard on the subject). I do not have to own a car or pay for car insurance here, at a savings of about $500 a month. That is more than enough to buy me a latte or two, even on a daily basis, as well as a trashy novel to read on the weekend.

In reality, I suspect living here is not very much different than living in New York or Washington D.C. or any other major metropolitan city in the U.S. in terms of overall cost of living. But for the most part, I simply do not recall there being as much chatter about the prices or costs of daily essentials when in the U.S. People that I knew there tended to take the prices as just part of the overall package of living and while cost of living was a consideration in, say, a job offer in the midwest versus one in the Bay Area, that’s about the only time I recall thinking so much about such things. I certainly don’t recall having daily discussions with anyone about how expensive things are. (I absolutely believe that my British colleagues have some misguided views on how much things cost in the US!) I find the incessant money talk to be one of the less charming aspects of my existence here. I wonder if the phenomenon has come out of a sort-of peer pressure to say that everything is so expensive, just because everyone else says so too!

That said, this does present some fodder for amusing stories. When I first arrived here, before my belongings made it over on the big boat, I bought a single plate and mug to hold me over until my own dishes arrived. Each of them was clearly marked on a sticker on the back,

“Marked down! Was £1.49, now £1.45!”

By my calculations that is not even a dime price difference on something less than three bucks in the first place (less than 3% discount in any currency). Am I missing something here? Should I be pleased at the bargain I received?

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8 responses to “On coffee and economics

  1. Us Brits do like a good moan.. prices, weather, sports, just whatever is most annoying on any particular day. The money thing has definitely got better over the past while – although a good example that’s been doing the rounds lately are songs on Itunes.. 79p vs 99 cents.

  2. notfromaroundhere

    Good point, this is the one silver lining to the fact that I haven’t managed to get a UK credit card because I don’t have a UK credit record… (clearly a subject for another post!) My American credit card still works at the iTunes US store. Of course, it makes no sense to me that the stores are so different, or that release dates for the same album are so divergent. I broke down and bought the Amy Winehouse disc here about two months before it was finally released on the iTunes US store.

  3. OH, we are so very obviously sisters:

    http://eastasiadiary.blogspot.com/2005/04/in-praise-of-globalization.html

    It is not until you are living and traveling abroad for extended periods that you realize just how marvelous all those ubiquitous Starbucks really are.

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