While I agree that Santo Domingo is cheaper than many other cities, it's still not "cheap."
Justa few things from the report to put into context.
"It is the world's most comprehensive cost-of-living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees."
Ok, so the report is intended for American companies, and is based on a dollar rate, it does not take into account, other currencies, or standard of living for locals. It's based cost of a basic standard.
"Sao Paulo and Rio de Janeiro are the most expensive cities in Latin America moving up from 119th and 124th positions to 34th and 40th place respectively... ...In particular, the cost of international-standard accommodation has risen significantly in these cities."
The key here is "international-standard accomodation" which is what they must use as a base. Although you can get a room or apartment pretty cheap in santo domingo, international standard, isn't very cheap.
"Santo Domingo in the Dominican Republic is in 126th position (65.3) and has dropped 27 places due to the depreciation of the Dominican Peso against the US dollar."
Since the report is from 2006, this report is probably reflecting the depreciation during the Ban-Inter crisis. I'd suspect that since the report, this has corrected itself, and Santo Domingo has back, probably at least as many places as it dropped. So it's probably safe to assume that it's probably somewhere around 99th place now.
"Ottawa remains the least expensive Canadian city but has climbed 32 places from 122nd to 90th (75.6)."
Ottawa, the city where I live was rated at 90th, just a few places above where Santo Domingo should be. So you can see that from my perspective, it's not that cheap.
Now, to put things into perspective, when I go to Santo Domingo I have a very good time, and don't find myself struggling all too much. This is because I stay at my GF's, and she has a car, which takes away quite a few expenses. But if I were to live in an "international standard" appartment, and have no transportation of my own, it probably would be a lot more difficult.
Taxes are high, services are practically non-existant, security is not great, groceries are expensive, add other complications of dealing without electricty, running water, tropical storms, etc. All these have financial implications. But I can deal with it, and it's a little bit cheaper for me to live there, than it is for me to live in Ottawa - as long as I have money in the bank.
If I were to try and earn a living there, my standard of living would decrease signifigantly, and that being that I can get better jobs than a great deal of dominicans.
For an average dominican, making an average wage, it's tough to do the math to figure out how they deal with accomodation, transportation, food, and a little extra for themselves, add a couple of mouths to feed, and it's mind boggling. You can forget saving up for a down-payment, or getting a mortgage. Standard of living is very low for the average dominican, not very high for the working expat. It's great if you're independatly wealthy.
So what I come to is this: "I think it bears relavance to the rate one would tip ..if you think giving a $1US tip amounts to 10% of a person daily pay....verus knowing that a $1US tip only equals 1% of a persons daily income....you might change your tipping rate.....no matter what the percentage of the bill is."
First off, 1$US probably amount to about 2.5% of an american waiter's wage. But people tip generously, because the waiter is probably striving for something better, provided good service, and we'd like for them to have that money. In the DR it's unfortunate that 1$US is 10% of the wage (if it's even that), but people will be reluctant to tip the Dominican as well as the American, because his wage is low (due to crap labour laws) and they don't want to be seen as a chump, the DR is SUPPOSED to be cheap, and there is an attitude in the DR of let the poor be poor, while in the US there are the ideas of "a dollar and a dream." Why not give the Dominican the same chance as the american. His wage is lower, chances are that after close (if at night), his ony way of getting home is, by taxi, by car, or walking(read: extra expense). Service people rely on tips to get ahead, people should give what's due.