Paris Most Expensive And Panama City Cheap? Not In My Experience…
A friend sent me a link yesterday to The Economist’s annual survey on the world’s most and least expensive places to live.
The “award” for most expensive goes this year to Paris, Hong Kong, and Singapore.
Meantime, the least costly cities in the world, according to The Economist, include Lisbon in Western Europe… and, in the Americas, Panama City.
I love these kinds of rankings. They’re at once interesting and meaningless.
I’m currently living between Paris and Panama City, and I have recently spent time in Singapore and Lisbon.
I have some ideas of my own about how much it costs to be in these places, and I wish I had a contact at The Economist so we could compare notes.
I agree that Singapore is no budget destination. People I spoke with when in that city last year assured me not everyone lives like the Singaporeans showcased in “Crazy Rich Asians.” Still, when the required permit to be able to own a car can cost more than the car itself (as it can in Singapore), you understand how Singapore comes out on top in a cost-of-living survey.
Of course, cost of living can be largely what you make it. What you spend in a place has to do with the circumstances of the place but also… and perhaps more so… with what you choose to buy.
Coincidentally, Kathleen and I were speaking recently about our relative costs of living in Panama City versus Paris. For us, Panama City is far more expensive. In fact, we spend more money when we’re in Panama City than we do anywhere else we spend time.
Yet The Economist reports that, according to whatever data they consulted, Panama City is one of the least expensive cities in the world. I wonder how much time any of the editors involved with the study have spent in Panama City…
Comparing Panama City With Paris
In Panama, we have a car… a big, expensive SUV. You can’t live comfortably or safely in this country without an SUV.
In Paris, we walk or use the Metro to get everywhere we want to go. We probably spend as much on gas in Panama as we do on Metro tickets in Paris, but, in Paris, we have no car maintenance, repairs, insurance, amortization, or parking expense.
In Panama, we buy a lot of imported food—steaks from the United States, cheese and butter from France, hams from Spain, and produce shipped into Panama from around the world. We also like Skippy peanut butter and Häagen Dazs ice cream. The good news is that (thanks to Panama’s position as a global shipping hub), all those products are readily available. The bad news is that they come at very inflated costs. We choose to buy them anyway.
In Paris, we buy mostly fresh, local food. One of the things we appreciate about being in Paris is that it’s hard when we’re there not to eat healthy. You have to go out of your way to find junk food or processed items. While 7-11s in the States sell Ding Dongs, string cheese, and hot dogs, corner shops in Paris sell fresh fruit and vegetables according to the season, baguette baked that day, and many varieties of hams and cheeses, for example.
They also sell water for 1 euro and wine for as little as 4 or 5 euros a bottle.
We’ve been known to buy that 5-euros-a-bottle wine in a pinch, but Kathleen’s preference is Freixenet. This sparkling wine from Spain costs US$11 in Panama… but only 6 euros (about US$7 at the current exchange rate) in Paris.
Eating out in Panama is more expensive, too… at least at the restaurants where we like to go. An expat-level restaurant in Panama City, in our experience, is more expensive than a standard restaurant in Paris. You can go to more expensive restaurants in Paris, but the day-to-day ones are generally as good as the “expat” spots in Panama.
Why do we favor the expat restaurants in Panama City, you may wonder…
Restaurants in Panama City are generally local or high-end. There’s no middle market. We go to local places, too, sometimes, but you can dine out on chicken, rice, and beans only so many times each month.
The budget killer when eating out in Paris can be the drinks. A small glass of Coke can be 5 euros. Stick with a carafe d’eau or wine… which is a better idea anyway and almost always cheaper than soda.
In Panama, we run our air conditioning year-round and throughout our apartment. We know people who say they turn their air conditioners on only in some rooms or only at night. You could live that way… but we don’t want to. It’s hot and humid and Panama City year-round. Going without air conditioning in this city means being uncomfortable… and electricity isn’t cheap per kilowatt hour.
In Paris, you need heating in the winter, but few apartments have air conditioning and you only need it in July and August anyway.
Bottom line, our annual utilities costs are much lower in Paris.
Housing is the biggest part of any budget. The average cost of real estate in Paris is about four times the average cost of real estate in Panama City on a per-square-meter basis. However, you’re generally living in a smaller space in Paris than you would be in Panama City.
When we were in Panama City full time, with our son and his dog, we lived in a three-bedroom, 4,000-square-foot apartment. In Paris, our pad is three bedrooms but 1,200 square feet.
We rented that apartment in Panama while, at the same time, renting out our apartment in Paris. The Paris rent we received was about the same in euros as the amount we were paying for rent in dollars in Panama—that is, 15% to 30% more, depending on the exchange rate.
That’s not a super-scientific comparison, but it gives you some context.
Would it cost you more to live in Panama City than in Paris, too?
I have no idea. You could open your windows and turn off the air conditioning and eat only where the locals eat in Panama… then drink only champagne and buy yourself a Ferrari to get around in Paris… and your relative costs of living would adjust accordingly.