Calculating the (real) Cost of Living |

Calculating the (real) Cost of Living

How expensive is it, really, to live in Singapore? That is the question a group of researchers from the Asia Competitiveness Institute (ACI) tries to answer in a new publication that compares cost of living across 103 of the world’s major cities. 

The answer, it turns out, depends on who you are: expatriate, or an ordinary resident. 

The study, titled Annual Indices for Average Residents and Expatriates on Cost of Living, Purchasing Power and Wages for World’s Major Cities, is the first-ever comprehensive survey of its kind that compares the cost of living not only across cities but also based on whether you are an expatriate or local resident, said its researchers, who are also part of the Lee Kuan Yew School of Public Policy, National University of Singapore. Other better-known publications, including the Economist Intelligence Unit’s Worldwide Cost of Living Index, and UBS’ Prices and Earnings Report, only look at cost of living and prices for expatriates, not locals. 

In the study, Singapore ranked fourth in cost of living for expatriates, trailing behind only Caracas, New York, and Zurich. For local residents, however, the city-state came in 48th. The main difference was in consumption patterns; one of the assumptions made by the researchers was that expatriates spent more on high-end products. Ordinary residents on the other hand had a “local pattern of consumption”. 

Dr Cledan Mandri-Perrott, the World Bank’s Head of Infrastructure Finance and Public Private Partnership (PPP), Singapore, said that the study’s findings could close the gap between perception and reality – especially at a time when “global mobility” was at an all-time high. 

“People are moving at all levels,” said Dr Mandri-Perrott. “From the IT person all the way to the CEO and chairman, and everyone in between.” This was “practical research” that could be applied to government policy, and help organisations make decisions about staffing opportunities in other cities, he added. 

The study also compared cost of living across geographical regions. For ordinary residents, cities in Western Europe were among the most expensive. African and Asian cities were among the cheapest – except for a handful of Asian cities. The cost of living for ordinary residents in Tokyo, for example, was more or less similar to that in London and Los Angeles. 

Details of the report will be available on at a later time. 

Dr Cledan Mandri-Perrott is Head of Infrastructure Finance and Public Private Partnership (PPP), Singapore. Prior to joining the World Bank, he was an advisor to governments and private clients on various infrastructure projects. A graduate in civil engineering, he also holds a MSc in finance, a LLM in commercial and transaction law from the University of Dundee, and a PhD in project finance from the University of Groningen.

Written by the External Affairs department.

Friday, 27 November 2015

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