This was originally posted on blogger.

Prices are interesting and sometimes hard to understand. In Taiwan, it feels like things are priced completely different to in the West and I’m trying to make sense of it.

Category 1: Local goods and services. The cheapest things in Taiwan are the things I find myself buying most often. Rent; bubble tea, fruit juice; restaurant food; massages; tour guides; Chinese lessons. I think these things are cheap because they can’t be sold abroad for a higher profit. The only demand is local Taiwanese people. Salaries here are (on average, I think) about a third of those in America (but since these important goods are also cheap, it means life is not so bad). My metric, which I think so far works, is to divide every price by 10. You see, there’s 30 NTD to 1 USD. So if you divide the NTD price by 10 and then compare that price to what you’d pay in the USD (specifically, Berkeley/SF) then you can see what’s reasonable and what’s ripping you off.

Category 2: Rich people’s local goods and services. Some restaurants or places in Taiwan cater to relatively wealthy clientale. These people may be making a Western salary or work for an international business in Taiwan and so their salaries – though modest in the West – lets them buy absurdly expensive things in Taiwan. Of course, it’s all a matter of expensive. A burger costing 10$ in the US is sometimes a great deal; but in Taiwan, it means you’re living the high life. I’ve found foreigner settings are like this; as are stores in Taipei or upscale establishments in Kaohsiung.

Category 3: Exportable/imported goods. This is where my divide by ten metric breaks down. Did you know that a small jar of Skippy’s peanut butter costs 6 USD here?? Absurd, but I pay it nonetheless. Skippy’s peanut butter, iPhones and other gadgets, USB cables, watches, saxophones, bikes all fall in this upper-tier price-range. They’re things that your standard person still needs to buy – including groceries! – but I think because it’s possible to export such products abroad, they charge standard international prices here (otherwise everyone would buy their laptops in Taiwan and fly them out to America later). Some things, like the peanut butter, are even more expensive here than in America because of shipping fees, I suppose. So strangely, a grocery store I think is one of the most expensive shops around (you’re better off going to a fresh market, where the food is cheaper because it can’t be exported abroad).

So there you have it, a little bit about living abroad, pricing strategy and international trade.