‘Most expensive’ yet again
August 18, 2011
NEWS ANALYSIS: Another ranking of the world’s major cities places the Norwegian capital in the top spot as most expensive, way ahead of cities known for high prices like Tokyo, Paris and New York. What may be most worrisome for Oslo residents, though, is how low they rank in actual purchasing power.
Norwegian politicians often dismiss international rankings that show Oslo to be more expensive than most other capitals. They’ll downplay taxes and argue that salaries also are higher in Oslo than other cities, while the powerful agricultural lobby, for example, will defend high food prices by claiming that Norwegians spend less of their total income at the grocery store than many others do elsewhere in the world.
A new study by the large Swiss banking group UBS, however, throws some cold water on the politicians’ and agricultural lobbyists’ claims.
In UBS’ annual study called “Prices and Earnings 2011,” the cost of a weighted shopping basket of 122 goods and services geared to western European consumer habits left Oslo in the top spot, followed by Zurich and Geneva. It’s probably no coincidence that all three cities are in countries that refused to join the European Union and which are known for protectionist policies, relatively high taxes and strong currencies.
Next most-expensive on UBS’ list were Copenhagen, Stockholm, Tokyo and Sydney, followed by Helsinki, Toronto and Singapore to make up the world’s 10 most expensive cities. New York was ranked 14th, followed by London at 15th. Paris was 12th.
On the ranking for wage levels, however, Oslo placed only fourth, behind Zurich, Geneva and Copenhagen. So the average earnings of Oslo residents don’t rank as high as the prices they must pay for goods and services, and that’s reflected in perhaps UBS’ most alarming ranking: Oslo’s domestic purchasing power based on net hourly wages.
While Zurich topped the list, followed by Sydney and Luxembourg, the average Oslo resident’s purchasing power ranked a lowly 26th, way below New York (in 8th place) and even Tokyo, in 23rd place. In other words, the residents of 25 of the world’s major cities including Geneva, Chicago, even London and Stockholm, enjoy more purchasing power than those in Oslo, according to the so-called “wealth management” experts at UBS.
And UBS’ price-earnings measurements did not take into account monthly housing expenses. Housing prices have soared in Oslo in the past few years, as have rents. That suggests Oslo residents’ purchasing power may rank even lower in comparison to other cities.
So even though Norway has often ranked as the “best country in the world” in which to live by the United Nations Development Program, it’s still mighty expensive for both locals and visitors alike. The politicians, lobbyists, wholesalers and retailers who effectively set prices in Oslo and elsewhere in Norway may shrug that off as the price one pays to live in their version of paradise, and most Norwegians don’t have the huge health insurance or college education costs that many Americans have. But that doesn’t necessarily take the sting out of a shopping trip.
To view UBS’ complete rankings and methodology, click here (external link).
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