Cost-of-Living Information Press Release

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Highlights from the 2012 Cost-of-Living Survey

Tokyo is the world's most expensive city for expatriates; Karachi is the cheapest
Most European cities drop in the ranking; Australian and New Zealand cities surge

Mercer’s Cost of Living rankings are released annually and measure the comparative cost of living for expatriates in 214 major cities. We compare the cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. We use New York City as the base city for the rankings and the US dollar as the base currency.

It is the world's most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowance for their expatriate employees.

Generally, currency fluctuations have remained moderate between the 2011 and 2012 ranking periods. But the US dollar’s weakening against some currencies, such as the Australian and New Zealand dollars and the Japanese yen, pushed affected cities up in the rankings. Mercer’s 2012 Cost of Living report shows a number of cities from Asia-Pacific dominating the top of the rankings, with half the cities from the region in the top 30 spots. Expatriates in New Zealand experienced a particularly considerable rise in cost of living in the prior 12 months.

In the Americas, São Paolo and Rio de Janeiro remain the most expensive cities. While accommodation prices have increased strongly, the Brazilian real has weakened against the US dollar. US expatriates who saw the US dollar appreciate in comparison to their host country currency are experiencing a lower cost of living.

There is a declining trend in the relative cost of living for expatriates in cities in South and Central Asia. Karachi, Pakistan, remains the lowest-ranked city in our Cost of Living rankings.

We sat down with Nathalie Constantin-Metral and Marie-Laurence Sepede to discuss the Cost of Living Survey results for 2012
(Video 3:12 min)

Cost-of-Living Information Services

Key features and benefits
To encourage mobility and to manage your international assignment costs, you need precise information to calculate fair, consistent expatriate compensation packages. Based on over 200 goods and services, our semi-annual surveys are conducted by professional researchers simultaneously in over 300 locations we cover. Carefully chosen vendors reflect only those outlets where your expatriates can buy goods and services of international quality.

An international basket of goods and services reflecting realistic spending habits established through years of extensive expatriate research.
Distinct cost-of-living (COL) indices for different types of expatriate shoppers.
Online Cost-of-Living Index Calculators that allow you to customize the COL index to your specific needs.
Reasonable, realistic indices.
Full list of stores and sources where prices are collected.
Immediate estimation of the cost-of-living allowance (COLA) using our Cost-of-Living Allowance Calculators.
Current information, with locations extensively surveyed twice a year by professional researchers.
More frequent updates for markets in flux.
Special cities surveyed upon request.
Methodologies that let you determine competitive purchasing power for all your employees, wherever they come from.

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Understanding Mercer's two Cost of Living methodologies

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MercerPassport gives you access to:

The world's premier country guides, covering 109 major countries
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To encourage employment mobility and keep abreast of the competition, you need reliable information to help you calculate fair, consistent expatriate allowances. Based on 39 factors within ten categories, Mercer's Quality-of-Living Reports contain all the key elements you need to calculate hardship allowances for transfers to over 420 cities worldwide. "Hardship allowance" refers to premium compensation paid to expatriates who experience – or should expect to experience – a significant deterioration in living conditions in their new host location.

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Mercer's Worldwide Survey of International Assignment Policies and Practices report offers comprehensive coverage of all areas of expatriate policies and practices. As the most trusted publication on the market, this report provides detailed analysis from over 1,000 companies on:

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Mercer’s new Global Mobility Metrics Report can quickly bring your mobility decision-making into sharper focus and help you identify gaps in your international assignment programme needs. Closing those gaps will help your company invest in people more wisely – and will enhance your reputation as a reliable source of advice on mobility issues.

Metrics places objectivity in the perceptions of managers and expatriates. It provides a rationale for informed decisions – and a "defence" of the mobility policy if warranted. But the impact of a metrics system goes further, allowing HR to predict future needs. For example, mobility metrics enables programme managers to ask:

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