» Sat May 28, 2011 4:05 pm
Other economic factors here besides supply and demand, some currencies just have less purchasing power than others even if the exchange rate says they should be better/equal.
Anyway, a famous indicator is the 'Big Mac Index' which looks at the price of Big Macs (a 'basket of goods' that remains relatively stable across nations) in various nations. In some nations X amount of cash will buy you Y Big Macs, its used as a rough indicator of some currencies purchasing power. For example, in China it costs the equivalent of $2.03 to buy a Big Mac (using current exchange rates and 2010 prices) while it costs $3.73 in the US. This indicates that the Yuan (Chinese money) is far undervalued (which is a current global economic concern). Meanwhile it costs $7.41 to buy a Big Mac in Switzerland, indicating that the Swiss franc is extremely overvalued in terms of its purchasing power.
Anyway, here's a chart:
http://www.oanda.com/currency/big-mac-index
It looks like Aussie and Kiwi money is a bit overvalued but using just that should something cost ~50% more in Australia? No. 10%, sure, but a 30 dollar increase on a 60 dollar item? Something else is going on.
Anyone know the cost to import to Australia? Maybe there's a tariff or something.
Ah! According to this:
http://www.dfat.gov.au/trade/negotiations/schedule/schedule.html
There's a 15% tariff on video games (write your representatives about that one I guess)
But still, not enough...
I can figure out why you pay more than others, but I can't figure out why you pay so much more than others.