A UBS study, published this week by the Swiss bank, compares the affordability of 71 cities around the world. The top three are Geneva. which is in third place, Zurich which is in second, and Luxembourg which is at the top. In addition to an overall measure of affordability, the report looks at how long it would take an average worker in each city to earn enough to buy a MacDonald’s Big Mac or an Apple iPhone 6.
To buy an iPhone 6 in Zurich requires 20.6 hours of toil. In Geneva it takes 21.6 hours. These two cities Swiss cities sit in first and second position on this measure. When it comes to buying a Big Mac it’s Hong Kong that wins with only 9 minutes of work required. In Zurich and Geneva you need 11 minutes to earn your two layers of beef.
- Geneva bars sell second most expensive beer in the world (Le News 30.06.15)
- Why Swiss farm produce is so expensive (Le News 27.02.15)
At the bottom of the list, an average worker in Nairobi, Kenya is likely to avoid both MacDonald’s and the Apple store. There, an average worker will need to work for nearly 3 hours (173 minutes) to pay for a Big Mac and nearly 12 weeks (468 hours) for an iPhone 6. The worst city for iPhone 6 affordability is Kiev, where you couldn’t earn enough between now and Christmas to afford one – 15.7 weeks or 627.2 hours of wages are needed.
The study uses New York City as its base. Only Zurich and Geneva are more expensive, however the residents of Zurich, Geneva and Luxembourg all earn more that their Big Apple equivalents, so when average incomes and costs of living are put together to calculate purchasing power, Zurich and Geneva move to the top of the affordability scale. 13 cities outdo New York City on purchasing power, or a worker’s ability to afford life there. Here is a list of the top 15 cities on this measure:
5. Los Angeles
14. New York City
While the study highlights Big Macs and iPhone 6s, to calculate these overall purchasing power rankings it uses a basket of goods and services that represents the monthly consumption of a family of three in Europe. Differences in consumption habits across the globe mean that an average worker in Zurich is unlikely to feel nine times better off than their counterpart in Nairobi. The consumption basket will be different. In Nairobi for example a Big Mac might be replaced with enough ingredients from a local market to make several burgers.
Jakarta has the lowest domestic purchasing power. Residents there have only one tenth of the purchasing power of someone in Luxembourg. Some major European cities sit somewhere in the middle. Paris ranks 17th, Brussels 18th, London 21st, Amsterdam 23rd, Rome 27th, Madrid 29th, Milan 32nd, Athens 38th and Lisbon 41st.
- Here’s something 250% more expensive in Switzerland (Le News 16.01.15)
- A Geneva taxi can cost more than your flight (Le News 29.03.15)
The most expensive products and services in Zurich and Geneva are, household appliances and haircuts. For some reason Geneva has particularly expensive clothing while Zurich doesn’t. But before Geneva residents plan clothes shopping trips to Zurich they should consider transport costs – both Geneva and Zurich have some of the world’s most expensive trains and taxis.
Getting your hair cut while on an international holiday however, makes great sense. Jakarta is the best place. Both men and women can get a chop there for under CHF 5. If you are a woman that’s around CHF 75 less than the CHF 80+ paid in Geneva or Zurich, and around CHF 40 less than the CHF 45 to 50 paid as a man. If you are looking for somewhere a bit closer to home, then Athens is a good bet. A male coif there goes for less than CHF 15 and a female one for under CHF 20.
Purchasing power rankings reveal more than simple cost of living comparisons, which position Zurich and Geneva as the world’s most expensive places. Residents don’t only spend, they also earn, and it is the combination of spending and revenue that really matters. Unfortunately we are constantly reminded of how much things costs while pay increases are infrequent and quickly forgotten.