THE ICE-CREAM EXCHANGE RATE.

I mentioned in a previous post that the meals here are significantly cheaper than in America. Thus, while a ten-dollar meal is cheap-to-medium by American standards, it is medium-to-expensive in Budapest. Thus, the official exchange rate of 200 forints to 1 U.S. dollar doesn't really give a good sense of how expensive a meal is, in the context of other Budapest meals.

I have remedied this situation by choosing a relatively stable food item and defining it to be the same price in both locations. Ice cream seemed like the obvious choice. I estimate that a nice cheap scoop of ice cream costs 2 dollars in America and 150 forint in Budapest. Thus, by the ice-cream exchange rate, we define

2 dollars = 150 forint

(this would look so much better in Latex). Thus, there are 75 forint to the dollar.

Let's see how this works in practice. Suppose I buy a meal for 2100 forint. By the official (but misguided) rate, this is 10.5 dollars—pretty reasonable, right? However, by the ice-cream rate, my meal is 28 dollars. Golly!

Well, I admit that ice cream could be cheaper in Budapest by a significantly greater degree than most other food is. Maybe. More research has yet to be done on how much of a difference this makes. Until then, I'm going to use this as an excuse to talk about ice cream and be a cheapskate.