In class, we discussed about the difference between the price of a haircut
in India and the U.S.
I found this interesting article about “How much it costs to get a haircut
around the world.” these data were recently released by the UBS. UBS analysts
looked at haircut services for men and women separately in big cities around
the world.
The price of a haircut ranges from $95.05 to $4.63 for women, and from
$77.72 to $4.50 for men.
The level of technology and service included in a haircut is probably the
same everywhere, then why is there such a difference?
It is not hard to discover that there is a relationship between the cost
for haircut and the average wage/salaries in that city. For example, Oslo,
Geneva, and New York City are the most expensive place to get a haircut, but on
another hand, the average salaries of these cities are also on the top of list.
This kind of makes sense to expect people who earn the more to pay more for
service, but I'm not sure if there's such a big difference in comparison to
average wages.
The prices also differ by gender, in cities like Jakarta, Taipei, and Hong
Kong men and women pay almost the same price for haircuts. But these are the
only exceptions that I can find among all these data. For the most part, women
pay on average 40% more than men for the haircut. In some places like Dublin
and Cairo, women pay almost three times higher than for men for haircut. I understand women may have longer hair and have more specific desire for
their hairstyle, but it doesn’t make sense to charge women 3 times higher
prices.
The only reason why some barbers can still have their job it takes some
time and probably a visa to fly to Jakarta and have a nice and cheap haircut. ☹
http://www.businessinsider.com/how-expensive-haircuts-are-around-the-world-2015-9
This was an interesting blog to read with a unique perspective. Since you are describing the Purchasing Power Parity and not the actual exchange rate, would no-tradeable goods like the ones you mentioned appear higher or lower than the PPP index compared to the exchange rate?
ReplyDeleteI think the higher price of haircuts is justified in countries with higher GDP per capita because the cost of living is much higher in these countries in general. Due to these higher costs, the barber must charge a higher amount in order to live at the same standard of living than a barber on the other side of the world. I think one could argue as well that the quality of haircut is different because the standards and certification required for barbers in countries like the U.S. are higher than that of a developing country.
ReplyDeleteI think the higher price of haircuts is justified in countries with higher GDP per capita because the cost of living is much higher in these countries in general. Due to these higher costs, the barber must charge a higher amount in order to live at the same standard of living than a barber on the other side of the world. I think one could argue as well that the quality of haircut is different because the standards and certification required for barbers in countries like the U.S. are higher than that of a developing country.
ReplyDeleteYeah and quality of haircut and materials used for a haircut are not the same everywhere. Women also may have more things done to their hair, require more skilled labor and it may take longer in general. In addition to that, as mentioned above GDP is different in different places so charging a certain price is justified given the context of the market it exists in, if it costs too much people won't pay for it, and if it's too cheap no business will make any money.
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