There are several excellent cost of living abroad studies conducted each year that provide a good idea of how much money you will need to support your lifestyle needs in your new country and city of choice.
Broadly speaking, Tokyo is the most expensive city in the world, as reported by The Economist Intelligence Unit and Mercer’s 2012 Cost of Living Survey. But a third study recently released by Numbeo shows Stavanger, Norway as the most expensive city in the world. All three studies produce different results because they use different methodologies. We will take a look at each of the reports and what they provide.
The Economist Intelligence Unit’s Worldwide Cost of Living 2013 study and Mercer’s 2012 Cost of Living Survey are conducted annually, primarily for the international corporate relocation market to help multinationals set pay scales and benefits for their employees. If you are a corporate employee, you may have access to one or both of these studies through your human resources department. If you are not and would like to purchase the reports, The Economist Intelligence Unit charges US$840 for their complete report. Mercer’s study is available for US$995. You can get summaries of the studies by clicking on the links above. Both studies are very complete and detailed and are based on proprietary methodologies used by the companies.
If you are a self-mover, though, and want to get a general idea of the cost of living in the country and city you will be moving to, we recommend a relatively new company named Numbeo, which calls itself the world’s largest database of user contributed data about cities and countries worldwide. What sets Numbeo apart from its competitors, other than not charging for its data, is its methodology. Numbeo crowdsources its cost of living data from around 80,000 people living in over 3,000 locations around the world. Compared with The Economist Intelligence Unit and Mercer, think of Numbeo as the Wikipedia of cost of living studies.
Numbeo’s data is generated through a form available on its website that allows anyone to contribute local cost of living information to the database by category. The Serbia-based company’s Chief Executive Officer Mladen Adamovic told us that Numbeo prevents multiple entries from the same contributor by checking IP addresses and cookies. We also asked him if contributors reflect a representative spread of high-budget, medium-budget and low-budget households. “That is a problem, especially in East Asia and South America,” he said. “We get mostly high-budget entries from those regions because of higher-paid corporate employees and expats. Those entries might not be the most representative, but we receive a pretty good sample from all other regions.”
Numbeo currently ranks 102 countries based on the company’s overall consumer price index for each country. Cost of living rankings also show the rent index, consumer price plus rent index, groceries index, restaurant price index and local purchasing power index for each country. Numbeo also measures 326 cities on the same group of indices. You can search the site by city for local food prices, apartment rents and many other factors that comprise the complete cost of living index.
Comments are closed