Tokyo is the most expensive city in the world in which to live out of 282 global locations surveyed as at 1 July 2010. While Tokyo is relatively cheap for items such as alcohol & tobacco (ranked 173), it is the most expensive for groceries and healthcare, and second only to Hong Kong for household accommodation costs. Whilst Tokyo has always been relatively expensive, this trend has been strengthened again recently, as a result of the Japanese Yen which has gained in value by about 18% against the United States Dollar in the past two years.

As the most expensive city in the world, Tokyo has an overall cost of living index of 153.2 (New York = 100), while Dubai (ranked 131 in the world) has a cost of living index of 82.15. Therefore Tokyo’s cost of living is 86% higher than Dubai. That means that an expatriate earning USD$5,000 per month in Dubai would need to earn USD$9,300 per month in Tokyo to enable them to have the same purchasing power, and therefore a similar standard of living as they had in Dubai. The cost of living for an expatriate is affected by both the availability and prices, of goods and services representative of an expatriate lifestyle, local inflation, and the exchange rate between the home and host country. As a result the cost of living has a significant impact of an expatriate’s salary package.

Hong Kong is the second most expensive city in the world for expatriates to live in. The high overall cost of living rank for Hong Kong is primarily a result of two expensive basket groups. Hong Kong is the second most expensive city in the world for healthcare, and is the most expensive city in the world for household accommodation which typically comprises 30% of an expatriate’s expenses. Hong Kong is a good example of why many international organizations compensate separately for healthcare as well as household related costs such as housing rental, water, electricity, household gas, household fuels, local rates and residential taxes. Items that are provided by the employer should be excluded from a cost of living index calculation. The cost of living index for Hong Kong excluding healthcare and household related costs is substantially lower than it’s overall cost of living index of 127.87 (New York = 100).

Hong Kong is relatively cheap for recreation & culture (ranked 236 in the world), education (ranked 244 in the world), as well as furniture & appliances (ranked 263 in the world).

Geneva is the third most expensive city in the world, with a cost of living index of 124.49 (New York = 100), mainly as a result of being relatively expensive in most of the basket groups with the exceptions being alcohol & tobacco (ranked 194 in the world), education (ranked 167 in the world), and communication (ranked 108 in the world), but also due to the 16% strengthening of the Swiss Franc against the Euro over the past 2 years.

The Americas most expensive city is Brasilia which is the world’s fourth most expensive city to live in as at July 2010. The economy of Brazil is a federal economy. Brazil is the ninth largest economy in the world and the second largest in the Americas, after the United States. The major roles of construction and of services (government, communications, banking and finance, food production, entertainment, and legal services) in Brasilia’s economy reflect the city’s status as a governmental rather than an industrial centre.

The Brazilian Real has strengthened by 11% against the United States Dollar in the past year, although it is still weaker than it was two years ago. Brasilia is ranked in the top 60 out of 282 most expensive cities in the world for each of the 13 basket group costs as follows:

-Alcohol & Tobacco rank of 7.

-Clothing rank of 2.

-Communication rank of 32.

-Education rank of 1.

-Furniture & Appliance rank of 4.

-Grocery rank of 52.

-Healthcare rank of 4.

-Household rank of 27.

-Miscellaneous rank of 28.

-Personal Care rank of 7.

-Recreation and Culture rank of 48.

-Restaurants, Meals Out and Hotel rank of 10.

-Transport rank of 15.

Caracas (ranked 11 in the world) is the second most expensive city in the Americas; however this may change as a result of the recent devaluation of the official exchange rate. Brasilia and Caracas are ranked first and second most expensive cities for education in the world.

Nassau (ranked 35 in the world) is the third most expensive city.

The most expensive city in the United States, and fourth most expensive city in the America’s, is New York (ranked 39 in the world).

The cheapest city to live in the Americas is Quito in Ecuador (ranked 276 in the world). The cheapest city surveyed in the United States of America is Indianapolis Ind (ranked 259 in the world).

Most expensive cities in the Americas (Global rank in brackets)

1. Brazil, Brasilia (4)

2. Venezuela, Caracas (11)

3. Bahamas, Nassau (35)

4. USA, New York NY (39)

5. Falkland Islands, Stanley (53)

6. Bermuda, Hamilton (54)

7. Canada, Toronto (62)

8. USA, San Francisco Calif (77)

9. Canada, Vancouver (78)

10. USA, Boston Mass (79)

The top 20 most expensive of 282 international locations using all 13 basket groups is as follows:

July 2010 Rank Country, City

1 Japan, Tokyo

2 China, Hong Kong

3 Switzerland, Geneva

4 Brazil, Brasilia

5 Norway, Oslo

6 Switzerland, Zurich

7 Denmark, Copenhagen

8 Liechtenstein, Vaduz

9 Russia, Moscow

10 France, Paris

11 Venezuela, Caracas

12 Monaco, Monaco

13 Australia, Sydney

14 United Kingdom, London

15 Angola, Luanda

16 Austria, Vienna

17 Australia, Canberra

18 Germany, Munich

19 Italy, Milan

20 Gabon, Libreville

Author Bio: Steven is Chief Instigator at Xpatulator.com a website that provides cost of living index information and calculates what you need to earn to compensate for cost of living, hardship, and exchange rate differences.

Category: Finances
Keywords: cost of living, America, index, rank