Basket groups are those items that you need to buy on a daily, weekly or monthly basis. Some of these items are paid for by the employer on an expatriate assignment and others that come out of the employees pocket. Basket Groups such as Accommodation, Transport and Education are often paid for, however if they are not then they can affect the amount that the employee may need to earn on their assignment. When calculating your cost of living when moving from one location to another it is important to take these basket groups into account.
When comparing the cost of living between 2 locations, the difference in the aggregate cost of all the items in each of the 13 basket groups are examined in each location, this is done by using the average reported price in each location for the same quantity of each item. Cost of living is the relative differential of the local cost of the basket groups and the ruling exchange rate between the 2 selected locations. The 13 different basket groups are weighted according to Expatriate expenditure norms and are listed below,