Think where you live is pricey? Try Tokyo or Sydney

Life Inc.

Americans may complain about the cost of living, but life is actually getting a bit cheaper here compared with the rest of the world, a new study finds.

None of the world’s 40 most expensive cities are in the United States, with the top spots dominated by cities in Japan, Australia and western Europe, according to a semi-annual report by the Economist Intelligence Unit.

Los Angeles, which somehow ranks as the most expensive U.S. city, is No. 41 on the global list, down from No. 24 six months ago. Chicago fell to No. 44 from 33, and New York is now less expensive than 48 other cities around the world, including Tel Aviv, Israel, and Dublin, Ireland, according to the report.

As anyone can confirm, the cost of living is not actually getting cheaper in the United States, but the global index is calculated in dollar terms, so the weakness of the dollar makes other cities relatively more expensive.

The Economist survey, mainly intended to calculate cost-of-living allowances for traveling business executives and expatriates, looks at the cost of living in 140 cities around the world, assessing prices of more than 160 items including food, clothing, transportation, utilities and "domestic help." The index factors in the cost of executive-level rental housing as well as sales taxes, but not income taxes or home sale prices.

(That might explain why Los Angeles is ranked as more expensive than New York.)

According to the Economist’s calculations:

  • A pack of Marlboros that costs $8.99 in New York goes for $15.11 in Oslo, Europe’s costliest city.
  • A loaf of bread that costs $2.36 in London is $6.48 in Paris (where it probably tastes better).
  • A liter of "local" beer costs $6.89 in Tokyo and $1.94 in Berlin (where it probably tastes better).
  • A two-course meal for two people should cost about $100 in Tokyo and $250 in New York. (So now you know how much to charge on your next expense report.)

Duncan Innes-Ker, a Beijing-based senior editor and economist for the Economist Intelligence Unit, said the index is most valuable in comparing the overall cost of living for executives considering relocation. By that basic measure London is 23 percent more expensive than New York and Tokyo is 61 percent more. (New York is the base city for the index.) Living in Karachi, Pakistan, costs less than half as much as New York for the same level of goods and services.

Here are the world’s 10 costliest cities, according to the index:

  1. Tokyo
  2. Oslo
  3. Osaka-Kobe, Japan
  4. Paris
  5. Zurich
  6. Sydney, Australia
  7. Melbourne, Australia
  8. Frankfurt, Germany
  9. Geneva, Switzerland
  10. Singapore

And here are the 10 cheapest of 133 ranked cities:

133. Karachi, Pakistan (cheapest)
132. Tunis, Tunisia
131. Mumbai, India
130. Tehran, Iran
129. New Delhi, India
128. Jeddah, Saudi Arabia
126. Algiers, Algeria
126. Panama City, Panama (tie)
124. Manila, Philippines
124. Dhaka, Bangladesh (tie)

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~ by mortgagecompliancecorner on July 11, 2011.

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