Structure, costs and implications of the basic food basket of the Central American countries.

Abstract

Since from its appearance the basic food basket (BFB) has been a political subject of strong debates, controversies and misinformation, the present investigation developed a more exhaustive and holistic analysis of its nature to evaluate the objectivity of the many statements that are frequently heard on this issue in the Central American region. The objective was to carry out a comparative analysis of the BFB of the Central American countries. A second objective was to analyze the relationship of the BFB with the current minimum wages in each country. To this end, it was initially decided to obtain information on its cost, structure, and coverage of the BFB and salaries in the countries of the Central American area. Subsequently, with these data, a more detailed comparative analysis was developed to assess the ability to cover its cost with the current minimum wages and the average salary of employees. To carry out this analysis, five indicators were created. The estimated indicators were the BFB cost per product, the BFB cost per person, the lower bound minimum wages (LMW) required to cover the BFB, the upper bound minimum wages (UMW) required to cover the BFB, and the average wages of insured workers (AW) required to cover the BFB. Secondary data were used for the analysis since they were obtained from official and unofficial but reliable sources. Data processing only required the estimation of the five indicators mentioned above. The results indicate that the structure, coverage and, therefore, the cost of the BFB vary considerably from country to country, which results in the impossibility of a credible comparison. This indicates that it is extremely difficult and even illogical to make a vis-a-vis comparison of the BFBs of the Central American countries. The same can be said of a comparison of this type in terms of salaries. One element that could be identified is that the BFB of Nicaragua turned out to be the most generous of all.