Switzerland and Japan dominate most-expensive expat cities list

ZurichThe results of the 2012 Worldwide Cost of Living survey by the Economist are out, and there’s little surprise that Switzerland and Japan each have two cities in the Top 4. Most potential expats are probably more curious about which are the cheapest cities in the world, and that particular honor goes to Karachi, Pakistan, so pack your bags and send us a postcard when you get there.

Unfortunately, you have to pay to get the full list of 131 cities, but they do provide the top 10 and bottom 10, plus some other interesting facts for free, so we have enough to at least some broader trends.

Ten most expensive cities in the world

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

Ten least expensive cities in the world

  1. Karachi, Pakistan
  2. Mumbai, India
  3. Tehran, Iran
  4. New Delhi, India
  5. Jeddah, Saudi Arabia
  6. Panama City, Panama
  7. Kathmandu, Nepal
  8. Algiers, Algeria
  9. Dhaka, Bangladesh
  10. Muscat, Amman

Extremely detailed but still questionable

The Economist Intelligence Unit checks prices on 160 different items in each city and then converts them into US dollars. Then they adjust the weights of each item before coming up with a total score for each city based on New York City always being 100. It sounds very impressive, and really it is, but still it’s hard not to quibble with at least some of their conclusions.

Zurich gets a score of 170 and Karachi gets a score of 46, by the way, so a similar group of items would cost a bit less than half in Karachi compared to NYC.

One questionable thing comes directly from the 3 detailed examples they provide for each of 16 selected cities. They show the price of a 1 Kg loaf of sliced white bread, of 1 Kg of rice, and of a liter of petrol. While the price of rice might actually be useful worldwide, the others can really throw the results off.

White bread and petrol?

According to their results, the cost of a 1Kg loaf of sliced white bread is US$7.96 in Tokyo, US$6.06 in New York City, and US$0.76 in New Delhi. For one thing, you can find better bread for half that price in NYC, and in Japan it’s unusually expensive because few people make sandwiches so there are cheaper alternatives. In other words, this data isn’t really helpful at all.

Also according to their figures, a liter of petrol (gasoline) is US$1.11 in New York City and US$2.15 in London. But for a typical expat you’d be out of your mind to own a car and drive in either city, at least for a daily commute, so this data point showing London twice as expensive as NYC isn’t helpful either, when a taxi or subway ride might be more accurate.

Substitutes are everywhere

For some reason, I find myself obsessed by these price comparison surveys, especially when they are done as well as this one, but still in the end I have to throw my hands up and ignore most of it. It’s probably a bit different for “career expats” compared to “lifestyle expats” because a career expat might insist on eating sandwiches while driving around, regardless of where they live.

But for lifestyle expats, meaning expats who move for a better lifestyle and standard of living, these things tend to balance out by making the best of the options that are in your new home. I remember hearing about the infamous US$20 hamburger before I went to Tokyo, and it turns out that if you order a hamburger in a fancy hotel restaurant it will cost that much. But you rarely hear about the US$5 bowl of chicken and noodles available on every other block that is just as filling. I’ve always found good substitutes for nearly everything I want wherever I am, so I’ve never paid US$8 for a loaf of white bread and I never will.

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