World’s Most Expensive Cities

Tokyo, Japan

What is the most expensive city in the world? Before you can even begin to answer that, you must first decide what “most expensive city” actually means. Several companies have done just that over the last few years and, due to the different methodologies used, compiled lists with surprisingly different results. We’ve compiled our own list of some of these surveys and the cities they’ve concluded are the most expensive cities in the world.

Mercer Cost of Living Survey, 2010
Highest-ranking city: Luanda, Angola

Mercer’s survey compares the costs of over 200 items in each of 214 cities. The survey covers the cost of housing, food, transportation and other essentials to help employers determine compensation for expatriate employees. This is the first of Mercer’s surveys to include African cities Luanda, Angola; Ndjamena, Chad and Libreville, Gabon. The high placement of these cities in the survey—Ndjamena placed third and Libreville placed seventh—can be explained by the fact that these areas, while rich in natural resources, are generally poor and expatriate employees must rely on newly built infrastructures. Other high-ranking cities on Mercer’s survey include Tokyo, Japan in second place; Moscow, Russia in fourth place and Geneva, Switzerland in fifth place.

Economist Intelligence Unit Cost of Living Survey, 2009
Highest-ranking city: Tokyo, Japan

Unlike Mercer’s, EIU’s survey disregards the cost of housing as it is usually provided by expatriate workers’ employers separately from their wages. The result is a list that may be more useful to the expatriate employees than to their employers. This list places Oslo, Norway in second place; New York City in third; London, England in fourth and Sydney, Australia in fifth. Luanda is notably absent from the top tier.

ECA International Cost of Living Survey, 2010
Highest-ranking city: Tokyo, Japan

ECA’s survey also disregards the cost of housing, as well as utilities, vehicles and schooling. In their survey, Oslo, Norway places second; Luanda, Angola places third; Nagoya, Japan places fourth and Yokohama, Japan places fifth.

UBS Prices and Earnings 2009
Highest-ranking city: Oslo, Norway

This report, published every three years by Swiss financial services firm UBS, is perhaps the most interesting report for those who aren’t relocating for work. By tracking the prices of a basket of goods and comparing them to wages, UBS calculates the purchasing power of citizens in 73 major cities around the world.

The basket consists of 122 goods and services, as well as apartment rent, based on consumer habits in western Europe. The wages are adjusted by working hours, social insurance contributions, taxes and other payroll deductions.

Their findings, excluding rent, place Oslo in the top position with Zurich and Geneva, Switzerland, occupying second and third place. Rent included, New York City is the most expensive in the world, followed by Oslo and Geneva. Mumbai, India, was the least expensive city in both cases.