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Commentary

The Starbucks Theory

Says Daniel Gross, in Slate:

…I propose the Starbucks theory of international economics. The higher the concentration of expensive, nautically themed, faux-Italian-branded Frappuccino joints in a country’s financial capital, the more likely the country is to have suffered catastrophic financial losses.

The idea is that anyone paying $5 for a cup of coffee is in the middle of a bubble. America has a gazillion, the UK 256, Spain 48 and uhem, Dubai 46. China has over 200.

And India: Zero.

But that doesn’t help. Pakistan and Iceland have zero too. It’s only the ones with a large number that need to be worried I guess.

On a purchasing power parity basis, I think we have a reasonably high concentration of Coffee Day (Rs. 40) and Barista (Rs. 55) outlets. Maybe a smaller bubble for us…sometimes too much caffeine can be bad for your economy?

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