An Interesting Price Comparison. Jordan vs. The US

Every country has the rich, the poor, and those in the middle. As the world gets smaller, price disparities are bound to disappear. Just as in the European Union. As countries first join people will take advantage of cheaper products in Romania, for example, until time comes when the prices in France are about equal to those in Eastern Europe.

A look at that price disparity between Jordan and the US is presented below for some products that commonly exist in the same form in both countries (that's why you won't see جميد or Burritos). The method I used is the cost of a product as a percentage of GDP. The percentage is used in Jordanian numbers to calculate a product's cost in Jordan. For example, the per capita GDP in the US is $46,859 and the annual minimum wage is $15,225 ($7.25 per hour Federal) that wage is 32.4% of GDP. If Jordanian minimum wages were to be 32.4% of Jordanian GDP, those wages would be $1,111.52 annually (I used 2100 hours a year, for Jordan that comes out to 53 cents an hour). So, here is a look at other products. I am equally surprised by the 28 cents Marlboros and the $2400 brand new Mercedes!

therefore, if the purchase power of incomes in the US and Jordan were equal, identical items would cost this much in each country:

Item Average
Price in
The US
percent
of GDP

100%
what the Price should be in Jordan
GDP Per capita $46,859.00 $3,421.00
A litre of Gas $0.70 0.0015% $0.05
A litre of Milk $1.00 0.0021% $0.07
Annual Minimum Wage $15,225.00 32.4911% $1,111.52
A pack of Marlboro $3.80 0.0081% $0.28
2009 Mercedes C-Class $32,900.00 70.2106% $2,401.91
Median House Price $175,200.00 373.8876% $12,790.70
A Pair of Levi's 501 $59.50 0.1270% $4.34
McDonald's Big Mac $3.57 0.0076% $0.26
A 20oz Bottle of Pepsi
$1.50 0.0032% $0.11
Coffee (1 Kg) $18.75 0.0400% $1.37
Annual College Tuition $6,585.00 14.0528% $480.75
Beef (1 Kg) $9.41 0.0201% $0.69
Rice (1 Kg) $2.00 0.0043% $0.15
Sugar (1 Kg) $0.90 0.0019% $0.07
Tomatoes (1 Kg) $2.10 0.0045% $0.15
Apples (1 Kg) $3.36 0.0072% $0.25

**1 US dollar equals 0.71 Jordanian Dinars.

6 ►I charge thee, speak!:

za3tar said...

maybe because i am tired 2o msatel halla2 .. but i couldn't understand how your table was calculated .. i.e. what the last two columns mean

mab3oos said...

I knew I should have gotten rid of the table and replaced it with a doodle, especially for Big Red guys.

I hope now it's clearer.

za3tar said...

whoo an embedded swipe at Big Red :-D .. why what is your allegiance ?

Anyway, yes it is clearer now.

Anonymous said...

Dude.. I seriously hope you are not studying economics. That is not how things work. But nice comparison, even if it is of no practical significance.

mab3oos said...

za3tzr, we are Sparta, we eat Big Red nerds for breakfast.

Anon, no I am not studying Economics. But, Shouldn't prices be this way if we wanted both peoples to have equalality?

Anonymous said...

This is the most idiotic econimocal analysis, yet it is still a brilliant idea.

But Gersh o nos for 1500 leera???????

I'm rolling on the carpet....hahahahahah

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