Blog

Dr. Zsuzsa R. Huszár, a global citizen

Educator (teaches Finance)

Researcher (examines regulators’ efficacy in equity markets)

Avid investor (trades currency, stocks, arts, basically anything)

Artist (paints in mixed media style if time permits)

This blog page is designed to share my economics and finance insights in a funny or sarcastic way to make current economics and finance issues more relevant for everyone.

Specifically, I introduce a “fun” measure for a very serious issue. A Coffee Cost of Living (CCL) measure aims to highlight the differences in living standards in form of a cup of coffee. While in the past the BIG-MAC index attracted lots of attention, it did not really capture the purchasing powers of citizens. More importantly, in today society we turned away from hamburgers. Our current addiction is COFFEE. Almost everyone is drinking coffee or tea and would like to be able to afford at least a cup of nice coffee a day. But who can afford it?

In the US, the monthly coffee affordability is 1083 cups. This is based on the $1.95 price for a tall black and median monthly income of $2,200 per person (based on annual income of $26,000 in 2014 ).

In the Canada, the monthly coffee affordability is 1066 cups. This calculation is based on the  price of $2.25 (Canadian dollar) for a tall black and median monthly income of $2,400 per person (based on annual income of $29,000 in 2014). The income is after tax for individuals (non retired). The Coffee price is obtained from a Starbucks in Toronto, 2015.

In the China, the monthly coffee affordability is 150 cups.  This calculation is based on the CNY 30 (Chinese Yuan) price for a tall black from Starbucks (only available in major cities as of 2015) and average monthly income of CNY4350 per person (based on annual income of CNY52000 (about USD 8,000 in 2014). Since the median income is not readily available, this estimate is quite positive based on the average number which is skewed because of the extreme high earners.

While we are not at all surprised that the living standards are lower in China, in my other posts I discuss this “coffee affordability” for some European countries which may be shocking.