Is Panama Really Cheaper?

One thing I am always asked is just how much cheaper it is to live in Panama than in the US, Canada or Europe. That question is perfectly understandable and reasonable, but it can get really complicated to answer unless you know the intimate details of the questioner's spending pattern.

Now, I have thought that I might put up a list of items and their prices from a Panamanian supermarket and compare those to my local US supermarket. I may do that, but it's not really the full story. I can you that you can go to the Rey supermarket in Panama City and find a display case full of Häagen-Dazs premium ice cream. It will cost you US$4.39 a pint, roughly the same it costs me in the US. I can tell you that the Rey supermarket carries just about anything I can find in the US. I can tell you that the fresh fruits and vegetables are ripe and cheap. I can tell you that the meat, regardless of cut, rarely exceeds $3.50 a pound ($7.70 a kilo), if that. All this is nice, but it rapidly descends into a long list of products, some of which will be relevant to you and some not. I may still put up a list, but I have a simpler way of getting the point across.

I have rented an apartment in Panama City which I will visit part of every month to represent the interests of my corporation. I currently rent an apartment in Bethesda, Maryland in the US. Let's compare.

In Panama City, I have rented in one of the best neighboods (Paitilla), arguably the best address in town. I didn't do that for the sake of my ego, but I knew that it would be useful to have a good address as a businessman. Had that not been a factor, I would have likely moved into a more modest, but nice, neighborhood.

On the US end, Bethesda is one of the nicest suburbs of Washington DC. It also has one of the highest average household incomes in the US. 80% of the adult residents have university degrees and fully 50% have post-graduate degrees. It is not a cheap neighborhood, quite the reverse. I live there to be as close as possible to our corporate offices. Running an international business is pretty much a 24/7 operation, not a 9 to 5, Monday-Friday operation. In any event, the two neighborhoods are very similar in respect to their "status". Both are considered expensive locally.

My apartment in the US is much more modest than the one in Panama. So I will have to compare another apartment in my building of similar size.

Both apartments described below are fully furnished. That means all the applicances, furniture and so forth necessary to set up house-keeping are present.

The apartment in Panama City has three bedrooms, two baths, a living/dining room, a full kitchen, and, instead of a balcony, it has an extra room enclosed in glass with a beautiful panoramic view of Panama City and the bay. It also has a small bedroom for a live-in maid and a bathroom for her. However, I do not intend to have a live-in maid, but will use that space for storage.

The apartment in Bethesda has three bedrooms, two baths, a living/dining room, a much smaller kitchen, and an open-air balcony with a view of the street below. It has no extra rooms that I can use as storage.

As an unmarried man, both apartments would give me plenty of personal space, plus space for business purposes. Because the examples I'm using are both fully furnished, the rent will give you an idea of not just the difference in prices for floor space, but also for everything you need to make it liveable space. As a result, both rents are way above average and cause people in both local areas to wince at the expense. The rent totals below are the actual, real life totals.

The Panama apartment costs $1250 a month.

The US apartment costs $4350 a month.

Is it cheaper to live in Panama? Yes. The Panama apartment rents at a 70% discount to its US counterpart. In my book, that's a heck of alot more instructive than the price of premium ice cream.

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