Evolution of the Cost of Living in Costa Rica compared to OECD Countries and Latin American cities

In this study, the cost of living in Costa Rica, and its capital San José, is analyzed and compared to OECD countries and some major cities in Latin America using the PPP-adjusted price level index from the Eurostat-OECD program (2017-2020) and the Worldwide Cost of Living Index from The Economist Intelligence Unit (2007-2020). In particular, Costa Rica has maintained a cost of living below OECD countries, but the cost has increased compared to certain upper and middle-income countries in Latin America. The city of San Jose shows a similar updward trend. The analysis by product groups identifies six categories in which Costa Rica has maintained a price level above Latin America and OECD countries: 1) bread and cereals, 2) alcoholic beverages, 3) personal transport equipment, 4) milk, cheese, and eggs, 5) non-alcoholic beverages, and 6) fish. Additionally, there are three categories in which Costa Rica is relatively more expensive than similar countries in Latin America: 1) health, 2) education, and 3) fruits, vegetables, and potatoes. Factors associated with entry barriers, lack of competition, tariffs, state participation in the market, and structure of public expenditure in health and education may contribute to explain why Costa Rica is relatively more expensive in those categories.