Is Moscow Really the Most Expensive City in the World?

When I saw the headline I couldn't believe it. "Moscow Ranks As World's Priciest City." The AP dispatch begins like this, "Moscow is the world's most expensive city for the second year in a row, thanks to an appreciating ruble and rising housing costs, a new survey reports." I have yet to travel to Moscow, and while I have known that things are changing in Moscow, from what I've been reading, I would have never imagined that it could possibly be more expensive than New York or London or Tokyo.

The article continues, "The cost of living for expatriates in the Russian capital is nearly 35 percent higher than in New York, which served as the base city for the survey released Monday." Okay, I thought, we're not talking about the actual cost of living in these cities, we're talking about the cost of living for expatriates. But I was still incredulous. Because I've gone apartment hunting on-line in Moscow with the thought of moving there, and while I didn't find it cheap, I did not find it excessively expensive.

That's when I decided to go to the source itself, Mercer Human Resource Consulting. At their website, they explain the purpose behind their survey and the methodology behind it. They also published their list of the top fifty most expensive cities for expatriates. New York City is their point of comparison and is automatically given a rating of 100.

Tokyo rates 122.1 and Hong Kong rates 119.4, and these made sense to me. Geneva is 109.8 and Paris is 101.4. Okay, I can see that. Dublin at 99.6 surprised me. So did Vienna at 96.9, because when I lived in Vienna, I found it to be much cheaper than living in New York. But of course that was back in the day when the U.S. dollar and the euro were exchanged evenly, one-for-one. I started to get suspicious when I saw that Kiev was given a 91.4 rating. And Almaty (that's in Kazakhstan, if you don't already know) listed in 30^th place with a rating of 89.6. Now, I knew something was amiss.

That's when I checked the fine print, as it were. "Mercer's annual Cost of Living Survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment." Okay, this part sounds reasonable. But it's the next part, "It is the world's most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees," that really got my attention.

What this index really tells us is how much would it cost you to maintain your New York City lifestyle in foreign cities. To put it simply, if you pay $1000 in rent in New York (absurd, I know), a similar apartment in Dublin would cost $996.

Well, this I can understand. If you decide to become an expatriate and demand to have the same kind of apartment, the same of kind of car, the same kind of food, and the same kind of television and entertainment, it will indeed cost you a pretty penny.

And I also understand, that for some, the unwilling expatriate, who is leaving America only in order to advance a career, they really need all the creature comforts from home that they can get.

But for the adventurer, the willing expatriate, who is willing to adjust their lifestyles to the local way, please feel free to disregard this index. It's nearly completely irrelevant.

I live in Prague, and the Mercer Index rates Prague 85.6. And I'm telling you that $50,000 a year would place you in the upper-middle class of Czech society. I'll provide some examples, a completely modern apartment can be had for less than $800 per month. Spending $10 on a restaurant entrée is considered extravagant. That said, a basic meal at McDonald's of a Big Mac, fries, and soft drink costs $5, and an English language newspaper from the States or the UK can cost $10.

At the end of the day, if you're willing to actually live within the local society, the cost of living in the cities surveyed by Mercer is significantly lower than what the Mercer index indicates.