Travel & Expat Lifestyle Magazine

Why it’s so difficult to compare expat cities by price

Santa Barbara

One of the first and most important questions any potential expat should ask is how much the new city will cost for a lifestyle similar to the one they are considering leaving. Many people and websites have tried to answer this question, and often the information is very useful, but almost as often it’s very misleading.

This is something I’ve studied quite a bit myself in my years of traveling around the world and living for periods of time in some places. You might be aware of a website called Expatistan that is basically a cost comparison tool that works pretty well. There’s another similar site built for English teachers abroad that has most of the same information without the simple interface, but both struggle from complications that might be unsolvable.

Everyone has their own definitions of most common things

While many things that expats need regularly do have reasonably fixed prices, like a Starbucks coffee or a Big Mac, most things do not. Just looking at the Expatistan data for Bangkok, it says an average “men’s haircut in an expat neighborhood” costs 244 baht. Yet when I lived there not long ago I paid 120 baht (about US$4) in the heart of an expat area just off Sukhumvit. I went to a basic barber shop, and the people paying twice as much might be going to a nice salon, so which figure is correct? It’s almost impossible to answer when comparing one person to another in two different cities.

Another example is when I asked a friend of mine how much a “budget breakfast” in his hometown of Santa Barbara would cost. He said around US$12 even though I’m sure I can find what I’d consider a “budget breakfast” for US$5 or even less. We both make similar incomes and are the same age, yet he wouldn’t consider going to something other than a trendy breakfast place, from the sound of it. So if more people like him fill in a survey than people like me, any city around the world is going to look incredibly expensive.

Substitutes are key to saving money in new places

The other main problem I’ve seen in surveys like this is that even when you can compare the same items in different places, it might be more misleading than helpful. For example, bread is very cheap in most of Europe, and nearly impossible to find in parts of Asia. If you compare the price of a loaf of sliced wheat bread it might seem like Asia is double the price of Europe. Peanut butter is another example, where it’s relatively cheap in the US, but expensive and hard to find in, say, South America.

It doesn’t take most people long in their new home to discover that there are local substitutes of almost everything, and they are usually better and way cheaper than the imported version of what you had back home. For example, spaghetti lovers will pay around US$3 for a package of semolina pasta imported to Indonesia, while the same sized package of rice noodles will be fresher and cost under US$0.50.

So when a survey asks how much spaghetti and tomato sauce costs in one city, it would be more helpful to compare that to the cost of rice noodles and chicken broth in another, but this gets very complicated and also has plenty of its own problems.

Guessing costs of living might be most accurate

In my own experience, I’ve found that you can make a more accurate guess at how much things will cost in another city based on local labor costs and housing costs. In other words, if the average local worker makes only US$1 per day in Hue, Vietnam, I know that the food they eat will cost even less than that, even if a bottle of French wine might be triple the price in France. And if the average worker in Zurich makes US$25 an hour, I know that finding anything cheap is going to be a challenge.


One thought on “Why it’s so difficult to compare expat cities by price

  1. Nice and accurate article. Thanks.

    Always it seems, between the lines there is this caveat: If you live exactly the same lifestyle anywhere as you live in the US you won’t save money.

    The key to living cheaper even in a country where labor is cheap is to live more like the locals which means for most a reduction in lifestyle. That’s not necessarily a bad thing. After all, there aren’t too many Jones’s there to try to keep up with.

    Another key is to stay away from the biggest cities where prices are usually highest. This will especially apply to housing and transportation – transportation simply because it is bigger to get around in. You may not like the local buses if they have them.

    In Thailand I rode a $US2,200 Yamaha 125cc scooter instead of driving a $30,000 car. That danged scooter would do 65 mph and get 100 mpg. For “scooter” think of the Vespa with the floorboards, rather than a Western motorcycle. Honda, Yamaha, Suzuki – take your pick.

    In that heat and humidity it sure would be nice to have an air conditioned car though.

    I could be most happy in a humble but climate controlled dwelling in a small town of maybe 25,000 people but I would still spend more than the locals. There are some Western things I wouldn’t be without like bread in Asia (buy a bread maker for $65) or a toothbrush, LOL.

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