Of the top 50 most expensive places to live based on the cost of living excluding housing, education, healthcare and transport, Europe has 18 locations, the Americas 14, Asia-Pacific 13, and Africa 5. The most expensive city in the Middle East is Manama ranked 54, while in South Asia it is Kabul ranked 602.

 

The top 50 Most expensive places to live – Excluding Housing, Education, Healthcare and Transport Baskets:

 

Switzerland and Japan dominate the rankings primarily due to their strong currencies which have made them relatively more expensive. Local inflation is far less of an influence on cost of living compared to changes in exchange rates. The impact of a strong currency is that imports become cheaper. For locally employed people, especially when purchasing imported goods and services, the cost of living may not seem to have a major negative impact. In fact overseas holidays become relatively cheap. However, it also means that Japan and Switzerland, as well as countries like Australia who have 6 cities in the top 50 based on overall cost of living, are relatively more expensive for those paying with foreign currency which impacts exports and the overall cost to an employer sending an assignee to work in these countries.

 

In addition to the impact of strong currencies, much of the developed world has historically embedded high cost of living structures that keep them amongst the most expensive places to live. Europe and America have 20 locations in the top 50 based on the overall cost of living index and 32 out of 50 places based on the cost of living excluding housing, education, healthcare and transport. The major factor contributing to this is the relatively higher level of pay in the developed world, particularly amongst lower level jobs. By contrast Africa, Asia-Pacific, the Middle East and South Asia have 30 places in the top 50 based on the overall cost of living index but only 18 out of 50 places based on the cost of living excluding housing, education, healthcare and transport.

 

To provide an assignee, sent to any of the most expensive countries, with a similar purchasing power to what they have in their home country, requires an adjustment to their assignment salary. The amount of adjustment depends on which country they come from. The larger the difference in cost of living, the larger the adjustment required to ensure a similar level of purchasing power in the host country.