Coming from a developing country, and now living in the US, I always make it a point to understand these two points for the sake of comparison. For example, on a recent trip I found the prices for food, drinks, taxi, etc to be slightly cheaper than prices in Barecelona. I did mention Lisbon being "cheaper" but it was an observation I made. I understand how it may be seem obnoxious when the comparison is between two countries that have opposing GDPs. I agree with Adrienne below that it's about the country's economic scale. Aussieland is so darn expensive even for an American! Even for people in the same pay grade, Aussies will find shopping in the US really "cheap."