Dollars and Laris

This post is about purchasing power and value of Georgian and American currency. However, I do feel the need to quickly note that my pluralization of “lari” as “laris” is more poetic license than a reflection of my actual usage: even when speaking English, I usually pluralize “lari” as “lari”.

*****

So I have this dollar bill on my desk that Tea gave me in Georgia to put in my wallet for good luck. I have resolved not to spend it while in the US, since this particular bill now has sentimental value, so I took it out of my wallet so I wouldn’t confuse it with the regular stream of dollar bills flowing into and out of my wallet and accidentally end up spending it. As I noticed it today, I reminded myself not to spend it and mentally compared its sentimental value with its purchasing power – or, as Marx might say, its exchange value.

Weirdly, I found myself comparing it to laris. What denomination of lari is most similar to a dollar bill? At first I thought it must be equivalent to a fifty tetri coin – half a lari. That made sense in terms of how often the things seem to go into and out of my pocket. But then I thought of it in terms of buying a drink when I’m out. When I go out in the US, if I want to buy the average 20 ounce soda, or a Snapple, I still expect it to cost about a dollar. When I buy a bottle of Nabeghlavi in Georgia, I expect it to cost a lari.

And of course this bottled beverage comparison is far from perfect. A vitamin water will easily run me two bucks, and in Georgia an iced tea will usually be a lari forty or a lari fifty. Prices go up and down depending on neighborhood or store. It may no longer be realistic for me to expect to get a Snapple for a dollar. But in terms of a very loose comparison, scaled to my consumption and spending habits, one dollar = one lari seems about right.

Same goes for food. If I expect to spend about ten or fifteen lari for a reasonable meal at a (Georgian) restaurant in Georgia, I expect to spend about ten or fifteen dollars for a reasonable meal at a restaurant in America. Again, there’s variation, but very loosely speaking when I would go out with friends and get kebabi and french fries and maybe a beer, I’d end up spending in the ten-fifteen lari range, 20 tops. When I go out with friends in NY and get a burger and fries and maybe a beer, I end up spending in the ten-fifteen dollar range, 20 tops.

*****

Of course, one dollar = one lari is not the actual exchange rate. It’s usually somewhere around one dollar = 1.65 lari, and so in some sense food and beverages in Georgia are “cheaper” in that for a person with some fixed amount of currency who has total freedom to choose whether to be in the US or Georgia and can exchange currency at market rates, that amount of currency would go somewhat farther in Georgia when expressed in the price of food and drinks purchased for eating and drinking outside of the home.

And I can use this currency conversion, in some sense. If I tell myself that I can forego a Snapple now and buy 1.65 Nabeghlavis in Georgia, I can give myself some sense of the opportunity cost of my actions here in NYC. I can similarly say that one restaurant meal here only costs 1.65 restaurant meals in Georgia, and surely I would be willing to forego 1.65 restaurant meals there to enjoy one restaurant meal here, especially if I can get a bunch of friends together. That makes the expense of going out in New York not sting so much.

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However, right after assessing the dollar bill on my desk at the rate of a single lari coin, capable of buying a bottle of Nabeghlavi, I remembered the conversion I established for myself before I came to Georgia, in order to try to ration out my paycheck. I had said that if I took home $2000 after taxes in a month in NY and 500 lari after taxes in Georgia, my conversion should be 1 lari = 4 dollars. In other words, expressed as a fraction of my paycheck, something that cost 1 lari in Georgia cost the same as something that cost $4 in the US.

That’s not a totally unreasonable conversion, given average salaries and taxes in both countries. However, that makes me realize how expensive that Nabeghlavi I always drink really was. It was one five-hundredth of my starting salary in Georgia. One two-hundredth of what many Georgian teachers make. Much more expensive, relative to the average salary in Georgia, than Perrier, the American yuppie sparkly water, which costs maybe $2 – one one-thousandth of a monthly paycheck, or less. I drank a bottle of Nabeghlavi a day.

It’s weird to think of myself as spending money lavishly in Georgia when I eat out, or drink mineral water.

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What’s really strange, though, is the cognitive dissonance here – that something like a meal at a restaurant or a bottle of mineral water is *simultaneously* much cheaper and much more expensive in Georgia than in America. Americans have more discretionary income than Georgians, but things cost more, but Americans usually have more things, but Americans also have more debt and Georgians usually have more property.

And of course the relative costs of goods are vastly different – for instance, in Georgia, delivering a baby might cost 600 bottles of mineral water, but in the US it might cost 15,000 bottles of mineral water. Cell phone service costs me between five and ten bottles a month in Georgia but at least 15-25 in the US, and many people pay 50 bottles a month or more. On the other hand, a jar of peanut butter costs six bottles in Georgia but only three in the US, probably because peanut butter is actually imported to Georgia from the US.

The point is, it’s strange and interesting and totally nontrivial to compare the value of a dollar in America to the value of a lari in Georgia. And don’t even get me started on quality of life.

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5 Responses to Dollars and Laris

  1. Anonymous says:

    While the prices of food and beverage products are about the same on average in Nebraska as they are in New York City, the cost of shelter are drastically different. I make almost the same amount of money per hour here in NE as most of the jobs I held in NY… yet I can now afford a car payment, insurance and a nice apartment. Granted, I have a living partner to help me with this, but it is not something we would be able to do in NY. In NYC, you pay an average of $1500/month rent for a small, sometimes dingy old apartment with limited access to a back or front yard, limited parking areas in many different neighborhoods with varying levels of safety. In Bellevue, NE I pay $550 per month for a 2 bedroom, 1.5 bath, 2 story “apartment” with its own front and back entrances, a back patio, washer and dryer and excellent maintenance in a lovely and safe neighborhood where parking troubles mean that you were 3 spots down from your regular spot. Now, of course there isn’t access to public transportation or a variety of shopping by foot, but the gas station is about 100 feet away ans I could (theoretically) walk to Wal-mart, Goodwill, the gym, Scooter’s coffeehouse, a dentist or Chinese food.

  2. In Tbilisi a medium shawarma costs 5 laris, about 3 dollars according to the usual exchange rate. A burrito (which is practically identical to a shawarma) costs 5 dollars in Reno, NV, about 8 laris. But according to your $2000/GEL500 salary-percentage conversion, the shawarma costs a shocking 20 dollars, while the burrito costs just over one lari. I was eating an average of four shawarmas a week (because they’re so delicious and convenient), which at that rate would come to 320 dollars a month.

    • panoptical says:

      Right. Well, think of it this way: each shawarma (shaurma) was 1% of your monthly paycheck. At four/week, with 4.33 weeks/month, you were spending about 17% of your take-home pay on shawarma (shaurma!).

      It’s a sort of trap for TLGers, because five lari really, really doesn’t seem like that much, but then our money always seems to run out long before the end of the month. This is why – because of the huge disparity between the way we think of the value of a lari (based on exchange rate/purchasing power) and the numbers we are used to dealing with in our budgets.

    • Billy Bob says:

      A shawarma is practically identical to a burrito? I don’t believe that at all. Although i’ve liked some of the shawarma i’ve had in Tbilisi, they don’t have any rice, which is the cornerstone of most burritos.

      They also aren’t spicy, they’re served with pepperoncini like peppers and tomato ketchup.

      I’ve not had a single dish in Georgia that is spicy.

      • panoptical says:

        You have to ask for “bev-ri tsi-tsa-ka” and you have to go to a place that actually makes their shaurma with hot peppers (they’re the little green ones that look like string beans). There’s a place on Tsereteli right across from the Dynamo stadium that makes a nice spicy shaurma on request. Georgians generally prefer theirs mild which is why the places they tend to recommend don’t necessarily have the peppers.

        Some Megrelian food is spicy. Anything with adjika, for instance. Still pretty mild by my standards though.

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