A recent survey has revealed some surprising changes in which cities are the most expensive to live in.
Tokyo is officially the world’s most expensive city with Luanda in Angola coming in at number two. Many might be surprised to see an African city so high in the table. In Luanda a bog-standard hotel room costs $400, a non-alcoholic drink in the lobby $10 (though a mere $2 in a supermarket) and a pizza on the street $25. In Moscow you can expect to pay about $9.60 for an international newspaper and in Tokyo, a cup of coffee including service averages $8.15 and the monthly rent on a luxury two-bedroom unfurnished apartment runs $4,766.
Recent world events, including economic and political upheavals, have affected the rankings for many regions through currency fluctuations, inflation, and volatility in accommodation prices. The most notable factor influencing the league table is the effect the global economic downturn has had on European currencies. This has meant the London which was the 18th most expensive city in the world last year is now the 25th and Paris has dropped from 27th to 37th.
For any student considering where to study abroad the latest league table of expensive cities makes for interesting reading. The ranking system by Mercer is by far the most comprehensive survey and is based on the living expenses for expats ( a person temporarily or permanently residing in a country and culture other than that of the person's upbringing.) The survey measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. New York is used as the base city for the index and all cities are compared against New York. Currency movements are measured against the US dollar. The cost of housing – often the biggest expense for expats - plays an important part in determining where cities are ranked.
Here are a few key findings:
• Moscow is Europes most expensive city
• Tel Aviv is the most expensive city in the middle east
• The cheapest European city to feature in the survey is Skopje in Macedonia
• Japan has three cities in the top 10.
• China now has two cities in the top 20 with Hong Kong staying at number 9 and Shanhai moving up 5 places to number 16.
• Australian cities have all also risen with 3 now in the top 20.
Although this survey provides a reasonable benchmark there are a few flaws. Hong Kong is the 9th most expensive city, but the tax rate is much lower so somebody living there could well find themselves with a higher disposable income than for example someone living in Paris which is 37th on the list. Also it is unclear how the survey goes about comparing in goods in a city like London the variation in say a pair of blue jeans is vast. You could pay as little as $12 or as much as $500. It would perhaps be useful to see which cities provided the greatest flexibility in costs. Things which are not taken into account like household bills and local taxes also mean the results do not paint the full picture.