UBS Prices and Earnings 2015 study: Zurich, Geneva and New York City are the most expensive cities in the world
- Zurich and Geneva are also in the top three cities for wages and purchasing power. Kiev, Nairobi and Jakarta are the bottom three.
- Workers in Hong Kong work four hours more a day than those in Paris.
- Earners pay the highest income tax in Copenhagen – 45% on average.
- Food costs 4.5 times more in Zurich than in Kiev. Haircuts are priciest in Oslo.
Zurich, 17 September 2015 – Today UBS is releasing the 16th edition of its UBS Prices and Earnings study, which examines prices, wages and earners' purchasing power in 71 cities worldwide. The study, published roughly every three years since 1971, compiles over 68,000 data points reflecting economic events that have shaped the world since the last edition in 2012.
The most expensive cities
Zurich, Geneva and New York City are the most expensive cities in the world, according to the prices for a standardized basket of 122 goods and services. When rents are added to the mix, Hong Kong moves up 13 spots in the rankings. By contrast, the cost of living is lowest in certain Eastern European cities such as Kiev, which is the cheapest city.
The highest wages
Workers in Zurich, Geneva and Luxembourg earn the highest gross wages. After taxes and social security contributions, Copenhagen loses 20 spots in the rankings, due to income deductions of around 45%. In Nairobi, Jakarta and Kiev, the lowest-ranked cities, workers receive only around 5% of average gross earnings in Zurich.
How many hours' earnings buy a Big Mac® or an iPhone?
Wage value is best described by comparing domestic purchasing power for goods that are as homogenous as possible worldwide. Salaries go farthest in Luxembourg, Zurich and Geneva, where the net hourly wage buys the most goods and services from the standardized basket. Nairobi and Jakarta have the lowest purchasing power, affording just one-tenth as much as workers in Luxembourg. A Big Mac® costs almost three hours of average earnings in Nairobi, compared with just nine minutes in Hong Kong. Workers in Zurich can buy an iPhone 6 after 21 hours of work; in Kiev, it takes 30 times longer.
Shortest working hours in Paris
People work over 2,000 hours per year in 19 major cities, most of them in Asia and the Middle East. The shortest working hours and highest number of days of paid vacation are enjoyed by workers in Western Europe. Workers in Hong Kong work 1,000 more hours than those in Paris, a difference of around four hours more per working day.
Seoul second-costliest for food; haircuts 19 times pricier in Oslo than Jakarta
The basket of 39 food items costs over four times more in Seoul than in Kiev, where the food basket costs the least. In terms of food prices, Seoul is second only to Zurich. Services tend to be correlated to local wages, with the cost of the basket covering services such as haircuts, dry cleaning and internet fees. Haircuts cost the most in Oslo and are 19 times pricier on average than in Jakarta.
Impact of recent economic events
The Swiss National Bank abandoned its price floor for the euro versus the Swiss franc in January, which had a big impact on the indicators. Zurich and Geneva rose to the top of the rankings. Eurozone cities plunged. Russian and Ukrainian cities plummeted due to the Ukrainian conflict and ensuing Russian sanctions, with Kiev now at the bottom of the price and wage charts. Instability in South America greatly affected exchange rates, altering the positions of cities such as São Paulo and Buenos Aires. In Asia, the Japanese yen lost value, but the South Korean won has appreciated versus the US dollar since 2012, meaning Tokyo now ranks lower and Seoul higher. Asia remains the continent with the largest variations in prices and wages among cities, while North America is still the most uniform.
Prices and Earnings historical data now freely available
The 2015 edition of the Prices and Earnings study is available on a new microsite, www.ubs.com/pricesandearnings, which for the first time also offers free access to all raw data collected from the first report in 1971 up to 2015. Prices and Earnings is also available as an iOS application, and in a digital UBS Newsstand version.
UBS Prices and Earnings 2015: www.ubs.com/pricesandearnings
Further information on UBS Wealth Management's Chief Investment Office: www.ubs.com/cio
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