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Thu Dec 14th, 2006 at 10:15:21 AM EST
What city is the best place in the world to live in for us rootless cosmopolitans? If we assume that we are all close-minded materialists (rational economic actors) and care only about the income/cost relation the answer may very well be... Berlin.
This at least would seem to be the conclusion of the most recent prices and earnings report from UBS (pdf), which was kindly linked to here by lacordaire
From the diaries - whataboutbob
Part of the discussion in the Son of American Pie Fight which I find interesting is whether the living standard in the US is really higher than in Europe. The UBS report is really interesting in that it provides a comparison of more than just prices -- it also includes wages, working times and vacation days.
It only includes the three largest US cities plus Miami, which presents something of a gap.
According to this city ranking, London is the most expensive place on earth, which I think is probably correct. However, I seemed to remember another city ranking in which Moscow was ranked as the most expensive city, which would conflict with this study. Sure enough, there seem to be at least three different rankings, with different results each.
How are we rootless cosmopolitans to decide?
The problem with these studies is that they use fluctuating currency rates. Surely, when it comes to decisions on living it shouldn't be too much to ask to provide a normalised standard? Say over the past 3 years?
On to the list. It will of course surprise you all that Berlin (with its 18% unemployment rate) is the best city in the world. Well, not according to living quality (it's a decent 16th), but according to purchasing power for your job.
On the 10th page of the UBS document you will find a ranking of the cities by purchasing power/hour of work, first gross, then net and following that the annual purchasing power calculated by a comparison of working hours. This ranking is somewhat strange because it ignores rent. Rent, though, is supposedly a major part of the picture for most of us and can also be taken as an indicator for property prices for those of us who'd rather buy. If rent is included, we get a completely different ranking. How different? Well, see here:
World cities by purchasing power
|Rank||City||Gross Income/H.||Net Income/H.||Prices Incl. Rent||Gross Inc./Prices||Net Inc./Prices||Average PP/H|
|1||Zurich ||115,10||124,20||87,30||131,84||142,27||137,06 |
|2||Geneva ||111,00||115,40||85,20||130,28||135,45||132,86 |
|3||Berlin ||84,30||82,10||64,40||130,90||127,48||129,19 |
|10||Auckland ||65,70||73,40||60,60||108,42||121,12||114,77 |
|11||Dublin ||88,30||104,60||84,30||104,74||124,08||114,41 |
|12||Los Angeles||86,30||97,00||80,60||107,07||120,35||113,71 |
|14||Sydney ||74,60||79,60||69,00||108,12||115,36||111,74 |
|15||Chicago ||88,30||94,70||82,20||107,42||115,21||111,31 |
|23||New York ||100,00||100,00||100,00||100,00||100,00||100,00 |
New York is indexed as 100. The last column shows an average of gross and net hourly income in terms of purchasing power. This is done because the survey admits not to have the perfect rates and because taxes will to some extent provide you with free or discounted amenities. There's no adjustment for the number of hours worked because it is assumed that free time is equally valuable to hours worked. We're lazy rootless cosmopolitans, after all...
Now discerning observers will have noticed that Berlin is, indeed, only #3 here. I suggest, however, that we disqualify Zurich and Geneva because they always win at this kind of thing, because the BNP which drafted the report is Swiss and thereby automatically biased, and furthermore because these aren't cities but rather towns. You can't be cosmopolitan in a town...
Seriously, no disrespect to Switzerland, which is probably one of the best places in the world to live in. I don't know Zurich, but Geneva is stunningly beautiful. The real lesson is that you will get a more comfortable life in much of Europe than in the largest cities of the USA -- and that you should avoid London like the plague (Dutch saying) if moving there doesn't give you at least a 30% payrise.
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