Oslo, Zurich, Copenhagen, Geneva, Tokyo and New York are considered the world's most expensive cities based on a standardized basket of 122 goods and services from the UBS “Prices and Earnings” survey.
At the other end seven Latinamerican cities from the list of 73 cities around the world, where data for the survey was collected between March and April of this year, figure among the cheapest including Buenos Aires and Santiago de Chile.
”When rent prices are factored into the equation, New York, Oslo, Geneva and Tokyo emerge as especially pricey places to live. The basket costs the least in Kuala Lumpur, Manila, Delhi and Mumbai”, points out the UBS report.
Out of the list of 73 cities taking New York as the reference with 100 points both excluding and including rent, Brazil’s Sao Paulo ranks 42 (with 63.3 and 48.9 points) in the list and Rio do Janeiro (59.6 and 44.9 points), 48; Peru’s capital Lima figures as number 60 (50.5 and 35.6 points), followed by Buenos Aires (50.4 and 37 points) and Santiago de Chile ((50 and 36.9 points), 61 and 62. Colombia’s Bogotá and Mexico City rank 66 and 68 (47.1 and 36.4, and 45.4 and 34.3 points).
Only Venezuela’s capital Caracas (91 and 76.6 points) figures in position 12, mainly because of an upsurge of inflation estimated in the range of 30%.
Regarding earnings the highest are in Switzerland, Denmark and the US.
The survey of 73 international cities found that employees in Copenhagen, Zurich, Geneva and New York have the highest gross wages. Zurich and Geneva – the two Swiss cities in the study – top the rankings in the international comparison of net wages. By contrast, the average employee in Delhi, Manila, Jakarta and Mumbai earns less than one-fifteenth of Swiss hourly wages after taxes.
One vivid way to illustrate the relative purchasing power of wages is to replace the abstract basket of goods and services with a specific, highly uniform product that is available everywhere with the same quality, and then calculate how long an employee would have to work to be able to afford it in each city. The study determined that employees have to work a global average of 37 minutes to earn enough to pay for a Big Mac, 22 minutes for a kilo of rice and 25 minutes for a kilo of bread. For the first time, a non-food product was used in the study to compare working hours.
The iPod nano with 8 GB of storage is an ideal example of a globally uniform product. An average wage-earner in Zurich and New York can buy a nano from an Apple store after nine hours of work. At the other end of the spectrum, workers in Mumbai, need to work 20 nine-hour days – roughly the equivalent of one month's salary – to purchase an iPod nano.
People work an average of 1,902 hours per year in the surveyed cities but they work much longer in Asian and Middle Eastern cities, averaging 2,119 and 2,063 hours per year respectively. Overall, the most hours are worked in Cairo (2,373 hours per year), followed by Seoul (2,312 hours). People in Lyon and Paris by contrast, spend the least amount of time at work according to the global comparison: 1,582 and 1,594 hours per year respectively.
In no other continent is the price spread between the most expensive and the cheapest city as wide as in Asia. While Tokyo ranks as one of the world's five costliest cities, Kuala Lumpur, Manila, Delhi and Mumbai are all at the bottom of the price range. Workers in Tokyo earn the highest wages in Asia. Likewise, consumers in Tokyo, Hong Kong and Taipei have the greatest purchasing power in the continent. Sydney ranks among the top ten cities in the international comparison.
London, the second most expensive city in the 2006 review, plummeted nearly twenty places following the pound's precipitous devaluation in March and April 2009 when the data was collected, landing in the middle in terms of Western European countries. During this time the GBP reached a low point of roughly 1.40 against the USD from which it recently appreciated to around 1.70. This rebound in the GBP exchange rate increased London's price level by 21% in USD terms, which would lift London from twenty-first to fifth in the UBS global price ranking.
Rail travel is most expensive in the United Kingdom and Germany. A second-class, one-way ticket for a 200 km rail journey in Germany (average price: EUR 51.40 or USD 67.20) costs approximately 1.5 times as much as in the rest of Western Europe. Only the United Kingdom is more expensive. In London, passengers have to be willing to pay EUR 68.20 (USD 89.10) – double the fare charged in other Western European cities.