Loading...
Reload document 
Open in new tab Kopfzeile
Rubrik
A comparison of purchasing power around the globe / 2006 edition
Prices and Earnings
Price comparison
Oslo, London and Copenhagen the most expensive cities
Wage comparison
Scandinavian and Swiss salaries the highest
Analysis
Income and leisure: two differently valued elements
of prosperity
Oslo (cid:1)
(cid:1) Stockholm
(cid:1) Helsinki
(cid:1) Tallinn
Copenhagen (cid:1)
(cid:1) Riga
Dublin (cid:1)
London (cid:1)
Brussels (cid:1)
Luxembourg (cid:1)
(cid:1) Berlin
(cid:1) Amsterdam
(cid:1) Frankfurt
Munich (cid:1)
Vienna (cid:1)
(cid:1) Zurich
Warsaw (cid:1)
(cid:1) Prague
(cid:1) Bratislava
(cid:1) Budapest
(cid:1) Vilnius
Kiev (cid:1)
Kiev (cid:1)
Kiev (cid:1)
(cid:1) Ljubliana
(cid:1) Milan
Bucharest (cid:1)
Paris (cid:1)
Geneva (cid:1)
Lyon (cid:1)
(cid:1) Barcelona
(cid:1) Rome
Madrid (cid:1)
(cid:1) Lisbon
(cid:1) Sofia
Istanbul (cid:1)
(cid:1) Athens
(cid:1) Montreal
Chicago (cid:1)
(cid:1) Toronto
(cid:1) New York
(cid:1) Los Angeles
(cid:1) Miami
(cid:1) Mexico
(cid:1) Caracas
Bogotá (cid:1)
Lima (cid:1)
(cid:1) Rio de Janeiro
(cid:1) São Paulo
Santiago de Chile (cid:1)
(cid:1) Buenos Aires
Cities (countries)
Amsterdam (Netherlands)
Athens (Greece)
Auckland (New Zealand)
Bangkok (Thailand)
Barcelona (Spain)
Beijing (China)
Berlin (Germany)
Bogotá (Colombia)
Bratislava (Slovakia)
Brussels (Belgium)
Bucharest (Romania)
Budapest (Hungary)
Buenos Aires (Argentina)
Caracas (Venezuela)
Chicago (United States)
Copenhagen (Denmark)
Delhi (New Delhi, India)
Dubai (United Arab Emirates)
Dublin (Ireland)
Frankfurt (Germany)
Geneva (Switzerland)
Helsinki (Finland)
Hong Kong (China)
Istanbul (Turkey)
Jakarta (Indonesia)
Johannesburg (South Africa)
Kiev (Ukraine)
Kuala Lumpur (Malaysia)
Lima (Peru)
Lisbon (Portugal)
Ljubljana (Slovenia)
London (Great Britain)
Los Angeles (United States)
Luxembourg (Luxembourg)
Lyon (France)
Madrid (Spain)
Manama (Bahrain)
Manila (Philippines)
Mexico City (Mexico)
Miami (United States)
Milan (Italy)
Montreal (Canada)
Moscow (Russia)
Mumbai (Bombay, India)
Munich (Germany)
Nairobi (Kenya)
New York (United States)
Nicosia (Cyprus)
Oslo (Norway)
Paris (France)
Prague (Czech Republic)
Riga (Latvia)
Rio de Janeiro (Brazil)
Rome (Italy)
Santiago de Chile (Chile)
Sao Paulo (Brazil)
Seoul (South Korea)
Shanghai (China)
Singapore (Singapore)
Sofia (Bulgaria)
Stockholm (Sweden)
Sydney (Australia)
Taipei (Taiwan)
Tallinn (Estonia)
Tel Aviv (Israel)
Tokyo (Japan)
Toronto (Canada)
Vienna (Austria)
Vilnius (Lithuania)
Warsaw (Poland)
Zurich (Switzerland)
2
Prices and Earnings 2006
(cid:1) Moscow
A comparison of purchasing power around the globe
2006 edition
Prices and Earnings
Beijing (cid:1)
(cid:1) Seoul
(cid:1) Tokyo
(cid:1) Shanghai
Hong Kong (cid:1)
(cid:1) Taipei
(cid:1) Bangkok
(cid:1) Manila
(cid:1) Kuala Lumpur
(cid:1) Singapore
(cid:1) Jakarta
(cid:1) Tel Aviv
(cid:1) Nicosia
(cid:1) Manama
(cid:1) Dubai
(cid:1) Delhi
(cid:1) Mumbai
(cid:1) Nairobi
(cid:1) Johannesburg
(cid:1) Sydney
Auckland (cid:1)
Prices and Earnings 2006
3
Editorial
Dear reader,
Why is a refrigerator relatively expensive in Nairobi? How much longer do people in the
USA work as compared to Europeans? Even today, answering these kinds of questions
with the help of the prices for 122 goods and services, and earnings data for 14 profes-
sions in 71 metropolises and economic centers around the globe, is a demanding and
somewhat eccentric project. Thanks to the Internet, e-mail, an established network of
contacts and UBS branch offices in almost all the world’s larger cities, we at least can
rely on efficient communications channels. It was a different world back in 1970, when
the then-chief economist of UBS, after a trip to New York, came up with the idea of de-
termining the “real” exchange rate for himself based on purchasing parity. In those
days, all requests had to be sent by mail and it really could take several weeks for a
questionnaire to make its way across the Atlantic. Phone calls and stamps were a hefty
share of the budget. From this year’s survey, we can see that telecommunication prices
are continuing to drop around the world.
Even in a globalized world, price and wage comparisons are important, which is why
you are now reading the thirteenth issue of “Prices and Earnings”. Price comparisons
are above all interesting to tourists and business travelers. Companies with subsidiaries
or production sites abroad send qualified employees, expatriates, out from the parent
company and they increasingly employ local specialists. They need a basis to determine
their wages. There is a difference in many places between local market-driven wages
and those adjusted for purchasing power. The level of earnings alone gives little indica-
tion of what those earnings can buy. This can only be seen after comparing purchasing
power, a process which establishes a link between prices and earnings. There are limits
to comparability, however. Prices often differ even within the city limits depending on
location and conditions – but also based on the person surveying the prices. In emerg-
ing countries, expatriates are often confronted with far higher prices than locals – be-
cause they don’t speak the language, don’t know their way around the city or simply
buy different things. We have tried to take all this into consideration, and to determine
an average price level in each case by commissioning our survey from several independ-
ent – local as well as foreign – correspondents. Local UBS staff and independent organi-
zations, including partner banks, chambers of commerce, universities, the student or-
ganization AIESEC and several private individuals gathered a total of over 30,000 data
records. We extend our warm thanks to everyone who took part in the survey.
The remarkable consistency of “Prices and Earnings” over the last 36 years means we
can now analyze data over time. In this year’s issue we examine whether the conver-
gence process has continued in an EU enlarged by ten new members. We also explore
the hypothesis of the “hardworking American and the idle European.” As a matter of
fact, there do seem to be differences in the way the trade-off between more money
and more leisure is valued on different sides of the Atlantic. New this year: Beijing, Del-
hi, Lyon and Munich have joined our urban universe.
Andreas Hoefert
Chief Global Economist
Simone Hofer
Editor-in-Chief
4
Prices and Earnings 2006
Contents
6
7
8
9
10
11
12
13
14
15
16
17
18
20
21
22
23
24
25
26
27
28
30
31
32
34
36
39
40
48
49
51
Methodology
Overview
Price levels
Wage and salary levels
Domestic purchasing power
Working time required to buy
Exchange rates used
Price comparison
Total expenditure on goods and services
Food
Clothing
Home electronics and household appliances
Apartment rents
Public transport
Cars
Restaurants and hotels
Costs of a city break
Services
Wage comparison
International wage comparison
Gross and net hourly pay
Taxes and social security contributions
Working hours and vacation days
Analysis
The internal market and euro drive
price convergence in Europe
Highly differentiated housing prices
Income and leisure: two differently valued elements
of prosperity
Appendix
Incomes and working hours in 14 professions
Exchanges rate changes 2003–2006
Inflation 2003–2006
Publication details
Prices and Earnings 2006
5