These rankings measure the comparative cost of over 200 items, including housing, transportation, food, clothing, household goods, and entertainment. New York is used as the base city, comparing 214 cities against it.


NEXT PAGE: TOP 50 CITIES WITH HIGHEST COST OF LIVING

Top 10 Most Expensive Cities


Ranking as of
July  2014

City

Country

Previous Ranking
2013

  1 LUANDA ANGOLA 1
  2 N'DJAMENA CHAD 4
  3 HONG KONG HONG KONG 6
  4 SINGAPORE SINGAPORE 5
  5 ZURICH SWITZERLAND 8
  6 GENEVA SWITZERLAND 7
  7 TOKYO JAPAN 3
  8 BERN SWITZERLAND 9
  9 MOSCOW RUSSIA 2
  10 SHANGHAI CHINA 14

Cost of living indices are often used in employment contracts, pension benefits, and government entitlements—such as employment benefits—to make adjustments for time and geographic location on expenditures.

Cost of living calculations are also used to compare the cost of maintaining a certain standard of living in different geographic areas, and a cost-of-living index is often used by employers in adjusting salaries for international assignments. Geographic differences in cost of living can be measured in terms of purchasing power parity.

The International Labour Organization (ILO) defines a consumer price index (CPI) as an index constructed to measure changes over time in the general prices of consumer goods and services. A CPI may be used to measure the effects of price changes on the cost of maintaining one’s standard of living.

Although the two are often referred to interchangeably and a CPI is often used in cost of living calculations, there is a basic difference between a CPI and a Cost of Living Index (COLI), the CPI really being a subset of COLIs. In fact, the CPI simply measures changes, over time or location, in the pricing of a basket of goods and services that can be purchased directly in the marketplace, like groceries, therefore signaling how expensive it is to live in a place relative to another. A COLI is a broader measure that also takes into account external forces—such as the effect of changing income tax rates on after-tax income and the cost of public goods such as healthcare, education and safety — and how these affect the minimum expenditure one needs to keep up in order to maintain the same standard of living across locations.
 

NEXT PAGE: TOP 50 CITIES WITH HIGHEST COST OF LIVING

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