Comparing the International Cost of Living
To calculate the cost of living, you must assess housing, transportation, entertainment and food costs. Currency exchange rates heavily influence costs and often fluctuate. One simple tool to use is the Big Mac index, which compares the cost of a Big Mac internationally, as it is a standard item available at McDonald's fast food restaurants. For instance, a Big Mac in the U.S. averages $3.54, whereas in Denmark the cost is equivalent to $5.07 and in Australia to $2.19. Whenever possible, use the most recent data to make comparisons. The U.S. State Department publishes quarterly cost of living reports at aoprals.state.gov.
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North America
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Costs vary widely even within the United States. The cost of living in large cities, such as San Francisco, New York, Los Angeles and Miami, is significantly higher than in cities such as Topeka, Kansas; Lubbock, Texas; and Boise, Idaho. While living in Mexico and Canada can be cheaper than living in the United States, the quality also can differ. Explore information, such as at http://www.solutionsabroad.com/en/relocating/relocating-category/cost-of-living-in-mexico.html, to compare the costs of living in different Mexican cities.
South America
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Let's compare rental prices for apartments. Monthly rent in Buenos Aires, Argentina, can range from 700 pesos ($183) to more than 1,000 ($262). In Rio de Janeiro, Brazil, reasonable housing prices are around 1,500 ($827) to 2,000 ($1,103) reais per month. In Santiago, Chile, an apartment may run 150,000 Chilean pesos ($278) a month. Keep in mind that additional relevant factors include whether you have children, what you consider to be adequate size and whether you want to live only near expatriates (in often pricier areas).
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Asia
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The most expensive cities in Asia include Tokyo, Japan; Seoul, South Korea; and Hong Kong, China. Overall, the high cost of living in major Asian cities stems from the weakening U.S. dollar. Smaller or rural cities are cheaper, though you must compare the lifestyles. How is transportation within the city different? Is there an airport or will you need to travel by train or car to another city? Food costs vary primarily based on personal preferences, and you should keep tabs on alcohol consumption, which can quickly add up.
Africa
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Vast disparities exist when comparing the cost of living in different African countries primarily because of rapid inflation and the inability to obtain comparable U.S. services and goods. Lagos, Nigeria, is considered one of the most expensive cities on the continent, whereas Harare, Zimbabwe, is one of the cheapest because of low food and housing costs along with a weak currency. Within South Africa, the cost of living for foreigners is also affected by the security costs, especially in Cape Town.
Australia
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Sydney, Australia, ranks as the most expensive city for foreigners, while New Zealand's cities, such as Auckland, are much cheaper. Food is grown domestically more in Auckland, so a family may be able to eat and drink comfortably for a month for under $500, whereas in Sydney, the family would be limited in dining options. Keep in mind that your decisions affect the amount of money you will spend. Hence, if you want to stay at a 4-star resort in Auckland or Sydney, be prepared to spend as if you were in the United States.
Europe
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According to a 2009 Mercer Cost of Living survey, London has dropped to No. 16, below New York. However, the euro remains stronger than the U.S. dollar, so Americans might be more sensitive to the cost of living in major cities. A recent survey by the Economist concluded that cities such as Paris, Copenhagen, Oslo, Geneva and Frankfurt are the most expensive in the world.
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References
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