Thursday, April 3, 2008

Cost of living

What is the cost of living index?

The cost-of-living index, or general index, shows the difference in living costs between cities. The cost of living in the base city is always expressed as 100. The cost of living in the destination is then indexed against this number. So to take a simple example, if London is the base (100) and New York is the destination, and the New York index is 120, then New York is 20% more expensive than London. Similarly, if London is the base and Budapest is the destination, and the Budapest index is 80, than the cost of living in Budapest is 80% of London's.

The figures below indicate the sum of individual weights attributed to all the items which compose each of the index categories. They are as follows:

Shopping basket 25.0
Alcoholic beverages 3.5
Household supplies 4.5
Personal care 4.0
Tobacco 2.5
Utilities 6.5
Clothing 13.0
Domestic help 3.5
Recreation & entertainment 18.0
Transportation 19.5
TOTAL 100.0


Vonric said...

Hmmmm Paris more expensive than London... I don't know where they found the figures but a simple comparison with the cost of the croissant at the backery Paul in South Ken and the one in rue Levis in Paris will show otherwise...

of course the difference has been diminished with the rise of euro, however the only explanation that I can find is that they compare London zone 6 with Paris zone 2... which is not really similar!

French Fry said...

Maybe they took all the mandatory service provide by the French state :)

What is a price of a shepherd pie in Paris!

I'm sure they is good reason, it would be nice to have access to the study to check that out.

French Fry said...

I just add a link to a description of the survey. Looks pretty solid.

Vonric said...

Being used to both city, I am just saying that it is not my personal feeling...
And also not the same result as in the UBS report in 2006:
or here: