The World’s Priciest and Cheapest Cities

If you want to visit an expensive place, Tel Aviv is your destination. As the world’s priciest city, Tel Aviv nudged Paris, Hong Kong, and Zurich out of first place in an EIU (Economist Intelligence Unit) report.

With Singapore, they compose the top five:

The World’s Most and Least Expensive Cities

The only good news from the EIU is that the price of beer has barely budged. Otherwise, globally, the average cost of living has increased by 3.5 percent, far exceeding the 2020 pop of 1.9 percent.

Up an average of 21 percent for one liter, the biggest culprit is petrol prices:

In addition, we can point a finger at the pandemic and supply chain distortions. In data collected from mid-August to mid-September 2021, U.S.-China shipping prices soared. Meanwhile, Tel Aviv is in the top spot because of higher alcohol, transport, and grocery prices.

Below, you can see that the cost of living tends lowest in the world’s poorest countries. At the lowest end of the cost of living list, we have Tripoli, Tashkent, and Tunis with Damascus at the bottom. Offering clues as to why they are low in the list, the World Bank tells us that Uzbekistan, Tunisia, Pakistan, Algeria, and Zambia are lower-middle income economies. Their per capita GNI (gross national income) range is $1,046 to $4,095. Even less, with income below $1,045, Syria is among the world’s poorest economies:

As for the report’s downs and ups, Rome plummeted from #32 to #48. The pandemic was cited as a reason. Then, mainly because of U.S. sanctions, Tehran moved up from #79 to #29 And, suffering from hyperinflation, prices in Caracas, Venezuela were up 1,766 percent.

Our Bottom Line: Cost of Living

For their report, EIU researchers looked at more than 400 individual prices for 200 goods and services in 173 cities. They included domestic help, utilities (electricity, gas, water, heating), ride-hire services, food, clothing, home rents. They gathered the prices that people paid rather than suggested retail.

Let’s conclude though with the bigger picture. You can see that food price increases were typical during the past century. Especially during the early 1920s and the 1930s, prices dropped when the economy contracted:

My sources and more: The original report on the cost of living came from The Economist Intelligence Unit. In addition to gathering my facts from the un-gated (and free) summary, I found extra detail at Yahoo Finance and The Economist. Then, this food prices graph from in2013prices came in handy.

Originally published at https://econlife.com on December 2, 2021.

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Located at the intersection of current events, history, and economics, econlife® slices away all of the layers that make economics boring and complex.

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Econlife Team

Econlife Team

Located at the intersection of current events, history, and economics, econlife® slices away all of the layers that make economics boring and complex.

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