Oslo is the most expensive city in the world, ahead of Zurich and Tokyo, but the well-paid residents of the Swiss financial hub enjoy the greatest purchasing power, said a study.
The annual survey of 72 cities by Swiss bank UBS found its own hometown had the world’s highest average wages and the biggest purchasing power.
Taking rent into account as well, the rankings remain unchanged, the study stated.
Tokyo has ousted Copenhagen to take third place in our price rankings compared with 2009. One remarkable finding is that when rents are included, relative price levels compared to New York move down in all cities except Hong Kong, it added.
At the regional level, the three frontrunners Oslo, Zurich and Tokyo differ from the general picture in their respective regions. Oslo and Zurich are around 20 per cent above Western European price levels, while Tokyo is a full 50 per cent more expensive than the majority of cities in Asia.
By contrast, the general picture for cities in Africa as well as in Oceania is relatively uniform.
The top and bottom places in the rankings are currently occupied by the same cities as three years ago. There have been a number of major changes in the middle group, however.
“Our analysis shows that changes in inflation and especially in exchange rates are the key factors that bring about shifts in price levels calculated in US dollars,” the survey added.
“For instance, the New Zealand and Australian dollars appreciated strongly against the US dollar, leading to a marked rise in US dollar price levels in Auckland and Sydney. The index of Moscow also gained due to currency appreciation, further amplified by general price inflation.”
“On the other hand, Dublin experienced a relative decline in the price index due to the financial and euro crisis,” the UBS survey pointed out.
On the salary front too, Zurich, Geneva, Copenhagen and Oslo head the rankings. The trend established in recent years has reaffirmed itself in international comparison.
At the top of the index are European cities, while in the regional comparison the highest wages are, on average, paid in North
America. At the lower end of the scale are South American cities, where on average gross earnings are only about one quarter of their North American counterparts.
The largest wage differences are in Asia, where the highest value (Tokyo) is twelve times higher than the lowest (Delhi), said the survey.
Gross wages are closest together in the more homogenous region of North America, with wage levels in New York just 1/3 times higher than Montreal, it added
The study also examined the price of a basket of 122 goods and services, adjusted for currency fluctuations. The cost of living index was calculated by dividing the price of goods by the weighted net hourly wage in 15 sectors.
“In Tokyo it takes nine minutes of work to earn enough to buy a Big Mac, while in Nairobi it takes 84 minutes,” it said.
Zurich residents must work 13 minutes for the hamburger, but other goods were relatively cheaper than in Tokyo, putting the Swiss city top of the purchasing power index.
Workers in Zurich can buy an iPhone after 22 hours work; in Manila, by contrast, it takes around 20 times longer.
Workers in New York and Hong Kong can buy a Big Mac after just 10 minutes’ work, UBS said.
The cheapest places to live were Delhi and Mumbai. New York was the sixth most expensive, Moscow came in at 40 and Shanghai at 49. The survey also looked at working hours and found the shortest were in Paris, Lyon and Copenhagen. Workers in Asia, Africa, the Middle East and South America toil the longest, at over 2,000 hours per year.