Cost of Living April 2012

The most expensive place to live in April 2012 is Tokyo based on the overall cost of living, encompassing all cost of living baskets. Zurich is the most expensive based on the cost of living excluding the housing, education, healthcare and transport baskets. Many companies cover these costs on behalf of the employee while on international assignments.

The latest international cost of living rankings are based on data collected during the past 3 months for 780 international locations, covering every country world-wide.

The cost of living (COL) data collected is representative of an expatriate lifestyle. The components of the COL data are local prices for fixed quantities of the same goods and services in each location, local inflation and exchange rates. Prices in each location are affected by availability (i.e. supply & demand) as well as local pricing regulations and taxes on goods and services (e.g.premiums on luxury brands). Local inflation is usually representative of local price increases which in turn impacts an expatriates purchasing power in the host country. The exchange rate impacts both the price of imports to the host country and the expatriate assignment salary calculation between the home and host country. The cost of living has a significant impact on the purchasing power of an expatriate’s salary package.

As the overall most expensive place to live, Tokyo has an overall cost of living index of 151.23, followed by Hong Kong with 145.93, and Zurich with 134.72. The overall index is comprised of 13 different basket groups. The assumption using the overall index is that everything is paid from the salary package. In addition, the cost of living calculations are weighted according to typical monthly international expatriate spending patterns. The Household Accommodation Basket for example, has a weighting of 30%, while the Groceries Basket has a weighting of 16.5%. That means that an international expatriate who, for example, earns 10,000 would typically spend 3,000 (30% of 10,000) on housing and 1,650 on groceries.

Of the top 50 most expensive destinations to live based on the overall cost of living, Asia-Pacific has 28 locations, Europe 12, the Americas 8, and Africa 2. The most expensive city in the Middle East is Abu Dhabi ranked 72, while in South Asia it is Mumbai ranked 366.

The top 50 Most expensive locations to live - Overall Cost of Living & All Baskets:

In many international assignments, basket groups such as housing, education, healthcare and transport are provided for by the employer, either in kind or in the form of an allowance over and above the salary. The reason why we would exclude these items, is to calculate the cost of living difference only for those items an expatriate would be responsible for paying for. If we take these basket items out of the cost of living calculation, the cost of living indexes change accordingly. On this basis the current cost of living index for Tokyo becomes 57.91, Hong Kong 42.45 (dropping all the way to rank 184) and Zurich 62.08. For an expatriate, where these benefits are provided for them, Zurich is the most expensive city to live based on what they would typically spend their salary on.

Of the top 50 most expensive places to live based on the cost of living excluding housing, education, healthcare and transport, Europe has 18 locations, the Americas 14, Asia-Pacific 13, and Africa 5. The most expensive city in the Middle East is Manama ranked 54, while in South Asia it is Kabul ranked 602.

The top 50 Most expensive places to live - Excluding Housing, Education, Healthcare and Transport Baskets:

Switzerland and Japan dominate the rankings primarily due to their strong currencies which have made them relatively more expensive. Local inflation is far less of an influence on cost of living compared to changes in exchange rates. The impact of a strong currency is that imports become cheaper. For locally employed people, especially when purchasing imported goods and services, the cost of living may not seem to have a major negative impact. In fact overseas holidays become relatively cheap. However, it also means that Japan and Switzerland, as well as countries like Australia who have 6 cities in the top 50 based on overall cost of living, are relatively more expensive for those paying with foreign currency which impacts exports and the overall cost to an employer sending an assignee to work in these countries.

In addition to the impact of strong currencies, much of the developed world has historically embedded high cost of living structures that keep them amongst the most expensive places to live. Europe and America have 20 locations in the top 50 based on the overall cost of living index and 32 out of 50 places based on the cost of living excluding housing, education, healthcare and transport. The major factor contributing to this is the relatively higher level of pay in the developed world, particularly amongst lower level jobs. By contrast Africa, Asia-Pacific, the Middle East and South Asia have 30 places in the top 50 based on the overall cost of living index but only 18 out of 50 places based on the cost of living excluding housing, education, healthcare and transport.

To provide an assignee, sent to any of the most expensive countries, with a similar purchasing power to what they have in their home country, requires an adjustment to their assignment salary. The amount of adjustment depends on which country they come from. The larger the difference in cost of living, the larger the adjustment required to ensure a similar level of purchasing power in the host country.

The top 20 Most expensive places to live in Asia-Pacific - Overall Cost of Living & All Baskets:

The top 20 Most expensive places to live in Europe - Overall Cost of Living & All Baskets:

The top 20 Most expensive places to live in the Americas - Overall Cost of Living & All Baskets:

The top 20 Most expensive places to live in Africa - Overall Cost of Living & All Baskets:

The top 20 Most expensive places to live in the Middle East - Overall Cost of Living & All Baskets:

The top 20 Most expensive places to live in South Asia - Overall Cost of Living & All Baskets:

The top 10 Most expensive places - Alcohol & Tobacco Basket (Note Alcohol only where legally sold) and includes Alcohol at Bar, Beer, Cigarettes, Locally Produced Spirit, Whiskey and Wine:

The top 10 Most expensive places - Clothing Basket which includes Business Suits, Casual Clothing, Children’s Clothing and footwear, Coats and hats, Evening Wear, Shoe Repairs and Underwear:

The top 10 Most expensive places - Communication Basket which includes Home Telephone Rental and Call Charges, Internet Connection and service, provider fees, Mobile / Cellular Phone Contract and Calls:

The top 10 Most expensive places - Education Basket which includes Crèche / Pre-School Fees, High School / College Fees, Primary School Fees and Tertiary Study Fees:

The top 10 Most expensive places - Furniture & Appliances Basket which includes DVD Player, Fridge Freezer, Iron, Kettle, Toaster, Microwave, Light Bulbs, Television, Vacuum Cleaner and Washing Machine:

The top 10 Most expensive places - Groceries Basket which includes Baby Consumables, Baked Goods, Baking, Canned Foods, Cheese, Cleaning Products, Dairy, Fresh Fruits, Fresh Vegetables, Fruit Juices, Frozen, Meat, Oil & Vinegars, Pet Food, Pre-Prepared Meals, Sauces, Seafood, Snacks, Soft Drinks and Spices & Herbs:

The top 10 Most expensive places - Healthcare Basket which includes General Practitioner Consultation rates, Hospital Private Ward Daily Rate, Non-Prescription Medicine and Private Medical Insurance / Medical Aid Contributions:

The top 10 Most expensive places - Household Accommodation Basket which includes House / Flat Mortgage, House / Flat Rental, Household Electricity Consumption, Household Gas / Fuel Consumption, Household Water Consumption and Local Property Rates / Taxes / Levies:

The top 10 Most expensive places - Miscellaneous Items Basket which includes Domestic Help, Dry Cleaning, Linen, Office Supplies, Newspapers and Magazines and Postage Stamps:

The top 10 Most expensive places - Personal Care Basket which includes Cosmetics, Haircare, Moisturiser / Sun Block, Nappies, Pain Relief Tablets, Toilet Paper, Toothpaste and Soap / Shampoo / Conditioner:

The top 10 Most expensive places - Recreation & Culture Basket which incudes Books, Cinema Ticket, DVD and CD’s, Gym/Fitness Club Membership, Sports goods and Theatre Ticket:

The top 10 Most expensive places - Restaurants Meals Out and Hotels Basket which includes Business Dinner, Dinner at Restaurant (non fast food), Hotel Rates and Take Away Drinks & Snacks (fast Food):

The top 10 Most expensive places - Transport Basket which includes Hire Purchase / Lease of Vehicle, Petrol / Diesel, Public Transport, Service Maintenance, Tyres, Vehicle Insurance and Vehicle Purchase:

The cheapest country in the world is Bhutan, followed by Cambodia. Interestingly India and China no longer dominate the list of cheapest places to live. There are almost as many places in Africa, as there are in Asia-Pacific and South Asia combined, that fall into the 50 cheapest places to live overall. The 50 cheapest locations to live include 15 places in Africa, 12 in Asia-Pacific, 10 in the Americas, 5 in South Asia, 5 in the Middle East, and just 3 in Europe.

The 50 Least expensive places to live - Overall Cost of Living & All Baskets:

About Xpatulator.com’s Cost of Living Data

Xpatulator.com’s cost of living data is based on prices for the same quantity and quality of goods and services, representative of expatriate lifestyle, in each city. The data is collected and updated on a quarterly basis. The cost of living data is used by Xpatulator.com clients to calculate salary purchasing power parity, cost of living allowances, and customized (i.e. clients can select their own base city) cost of living indexes for expatriate assignments online, using Xpatulator.com’s 3 premium content calculators.

The 13 basket groups do not count equally and are weighted according to expatriate expenditure norms as follows (weighting percentage is in brackets):

1. Alcohol & Tobacco (2%): Alcoholic beverages and tobacco products.
2. Clothing (2.5%): Clothing and footwear products.
3. Communication (2%): Telephone, Internet, Mobile Contract and Calls.
4. Education (5%): Creche Fees, School Fees, College Fees, and Tertiary Study Fees.
5. Furniture & Appliances (5%): Furniture, household equipment and appliances.
6. Groceries (16.5%): Food, non-alcoholic beverages and cleaning materials.
7. Healthcare (5%): Doctor Consultation rates, Private Ward Rate, Prescription Medicine, and Private Medical Insurance Contributions.
8. Household (30%): Housing rental, utilities, local rates and residential taxes.
9. Miscellaneous (3%): Stationary, Linen and general goods and services.
10. Personal Care (3%): Personal Care products and services.
11. Recreation & Culture (6%): Books, Camera Film, Cinema Ticket, DVD and CD’s, Sports goods, Theatre Tickets.
12. Restaurants Meals Out and Hotels (2%): Dinner at Restaurant (non fast food), Hotel Rates, Take Away, Drinks & Snacks (fast Food).
13. Transport (18%): Public Transport, Vehicle Costs, Vehicle Fuel, Vehicle Insurance and Vehicle Maintenance.

About Xpatulator.com
Xpatulator.com is the most comprehensive source of international cost of living information. We provide free international cost of living overviews and rank information covering 13 cost of living baskets and every country around the world as well as premium content calculators.

Founded in 2007, Xpatulator.com’s mission is to organize the world’s cost of living indices, exchange rates and relative hardship indices and make it accessible and useful to all.

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