If You Think New York is Expensive, Life in These 21 Cities is Even Pricier
If you think New York is an expensive place to live, then the Economist’s 2015 Worldwide Cost of Living index will blow you away, because 21 other cities in the world are even costlier. That has big implications for companies trying to recruit talent overseas or considering moving executives to overseas locations. According to the Economist Index, what seems like good compensation in New York may barely get the bills paid in many other cities.
Published twice a year, the index is based on the prices of 160 different products and services, such as food, clothes, rents, utilities, private schools, personal care items, recreation costs and other things. Economist Intelligence Unit researchers survey supermarkets, mid-priced stores and specialty outlets, and the prices reflect what customers are actually charged. Researchers then converted each price to U.S. dollars at the prevailing exchange rate and weighted the prices to create comparative indices. They collect more than 50,000 individual prices in each survey, conducted each March and September and published in June and December.
Here’s how the price indexes looked for the 10 most expensive cities, according to the study (100 = New York):
- Singapore: 129
- Paris, France: 126
- Oslo, Norway: 124
- Zurich, Switzerland: 121
- Sydney, Australia: 120
- Melbourne, Australia: 118
- Geneva, Switzerland: 116
- Copenhagen, Denmark: 115
- Hong Kong: 113
- Seoul, South Korea: 113
Note that half the cities on the list are in Western Europe, but Paris is the only one in the Euro Zone. None are in North or South America. New York, against which all other cities are compared, was once itself in the top 10 between 2000 and 2002 before falling as far down as 49th in 2011 and to 22nd this year.
Asia’s getting much more expensive, according to the study. Even though weak inflation and a cheaper yen have pushed Tokyo and Osaka down in the rankings, Seoul, which was No. 50 five years ago, is now in the top 10. The cost of living there now rivals Hong Kong’s.
“It is interesting to note that Asian cities tend to form the priciest locations for general grocery shopping, with Seoul becoming the most expensive location for everyday food items,” the report said. “However, European cities tend to be priciest in the recreation and entertainment categories, with Zurich the most expensive, perhaps reflecting a greater premium on discretionary income.”
The top five cities haven’t changed since the last study, though unpegging the Swiss franc from the euro means that Zurich and Geneva would be the world’s most expensive cities at today’s exchange rates, with indices of 136 and 130 respectively, according to the report.
Not everything in the top 10 cities has sky-high prices. Groceries in Singapore, for example, are only 11% more expensive than in New York. That’s a deal compared to No. 10 Seoul, where groceries are 49% higher, or Tokyo, where they’re 43% higher. When it comes to clothes, however, there’s nowhere in the world more expensive than Singapore — the price premium in the malls of Orchard Road is over 50% higher than in New York, the study said.
But ironically, South Asia is also home to some of the world’s cheapest cities (100 = New York):
- Karachi, Pakistan: 44
- Bangalore, India: 44
- Caracas, Venezuela: 45
- Mumbai, India: 45
- Chennai, India: 46
- New Delhi, India: 48
- Tehran, Iran: 49
- Damascus, Syria: 49
- Kathmandu, Nepal: 51
- Algiers, Algeria: 52
India’s large population and untapped potential are much of the reason the country has so many of the world’s least expensive cities, according to the study, but low-cost cities often face some unique challenges.
“The Indian subcontinent may be structurally cheap,” the report said, “but an increasing number of locations are also becoming cheaper because of the impact of significant political or economic disruption. This also means that there is a considerable element of risk in some of world’s cheapest cities. Karachi, Kathmandu, Algiers, Caracas and Tehran have faced well-documented economic, political and security challenges.”