Mercer: Tokyo Tops Cost-of-Living List

June 16, 2003 ( - Companies relocating employees to Tokyo are going to have to pay a pretty penny, after the Japanese capital replaced Hong Kong as the world's most expensive city.

Overall, cities in Asia held lofty positions in the 2003 edition of Mercer Human Resource Consulting’s Cost-of-Living survey. After Tokyo, Asian cities held the third, fifth, sixth and eighth places on the list.

The United States did not have to look to far down the list, finding New York City in the tenth. The Big Apple was used as the base city scoring 100 points, with Tokyo scoring 126.1 points and is almost three-and-a-half times costlier than Asuncion, Paraguay, whose currency depreciated against the U.S. dollar and replaced Johannesburg in South Africa as the least expensive city in the survey of 144 cities, scoring an index of 36.5 points.

The results show the gap between the world’s most and least expensive cities continues to narrow. This trend, however, has moderated, with the difference in the index scores falling by 4% this year compared to 15% last year.

“The changing global economic environment has had a major impact on the cost-of-living index this year,” says Rebecca Powers, an international consultant in Mercer’s San Francisco office. “The depreciation of the US dollar against the Euro, high inflation, and economic recession in many countries have modified the scores of a number of cities.”

Rounding out the top ten after Tokyo; the cities, and their scores, looked like this:

  • Moscow, Russia (114.5)
  • Osaka, Japan (112.2)
  • Hong Kong, China (111.6)
  • Beijing, China (105.1)
  • Geneva, Switzerland (101.8)
  • London, United Kingdom (101.3)
  • Seoul South Korea (101.0)
  • Zurich, Switzerland (100.3)
  • New York City, USA (100.0)

American Idylls

After New York, other expensive cities in the Americas include Los Angeles (22nd, with an 85.6 score), Chicago at 25 th (83.9), Miami 27 th , (83.7), and San Francisco 30 th (83). All the US cities surveyed have fallen in the rankings due to the depreciation of the US dollar against European and Asian currencies.

Canadian cities are much cheaper, with none of those surveyed among the world’s 100 most expensive cities. Toronto and Vancouver maintain their previous year’s positions at the 104 th position (64.9) and 110 th place (63.2), respectively. The Canadian capital, Ottawa, is the least expensive Canadian city in the survey, taking position 127 (57.2).

South American cities were the hemisphere’s least expensive, due to economic and political turmoil suffered this year. Montevideo, Buenos Aires and Bogotá were among the cheapest cities surveyed, with scores of 46.5, 44.0, and 43.9, respectively. On the upper end of the South American scale, Lima has replaced Caracas as the most expensive city, at 108 th with a score of 63.4. San Juan, Puerto Rico is the costliest city in Central America and the Caribbean, ranked 43 rd (score 78.4).


In the European Union (EU), London is by far the most expensive city, and has risen three places in the rankings this year to 7 th position. Accommodation and transportation costs, together with duty on items such as alcohol and tobacco, are particularly high in London compared to the rest of the EU, and have helped drive up the city’s score, according to the survey’s authors.

After London, Copenhagen is the next most expensive city in the EU, soaring to position 15 (89.4) from 62 nd place last year. Other high-scoring cities include Milan at 17 th (87.2), Dublin 21 st (86), and Paris in 23 rd (84.3).

Pacific Rim

Though Japan is suffering deflation for the fourth consecutive year, the appreciation of the yen against the US dollar makes Japanese cities among the costliest in the world. Overall, of the world’s 20 most expensive cities, half are in Asia.

Globally, New Zealand and Australian cities remain relatively cheap. In fact, Sydney, Australia is the only Australian city among the world’s 100 most expensive, at position 67 with a score of 73.7. However, even with relatively low cost-of-living score, cities in these two countries rate among the highest for quality of life.


Johannesburg, no longer the cheapest city in the world, has moved up to occupy the 133rd position (score 50.9). Conversely, the largest drop in the rankings this year was Harare, falling from position 26 to 143 (score 39.5) due to the drastic depreciation of the Zimbabwean currency.

Though the cost of living in Middle Eastern cities has been relatively stable, Beirut and Dubai have moved down to 25 th and 63 rd place, respectively (scores of 83.9 and 74.2). The move is primarily a result of the rising costs in European venues. A further decline was experienced in Cairo, whose currency is no longer being pegged to the U.S. dollar. As a result, Cairo has fallen in the rankings from position 51 to 102 (score 66.3).

The survey measures the comparative cost of more than 200 items in each location. These include housing, food, clothing, and household goods, together with transportation and entertainment.