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by lumost 779 days ago
As economies develop, goods become cheaper and services become more expensive. If you visit rural Peru, a massage is roughly the same price as two gatorades - or 3 liters of clean drinking water. Shoe shining is 1/10th the price of a 1 liter bottle of clean water.

Contrast this with the US where a service like a massage would be >100x more expensive than a liter of clean drinking water. The same pattern holds true with other services such as shaves/haircuts etc.

1 comments

Yup, and it's called “Baumol's Cost disease”.