Wednesday, June 20, 2007

Moscow is world's most expensive city to live in

You can read about it

here

here

here

One article says "In Moscow, a luxury two-bedroom apartment will cost an expat $4,000 a month; a CD rings up at $24.83; one copy of an international daily newspaper is $6.30; and a fast-food hamburger meal totals $4.80." Only two U.S. cities made the top 50, NY and LA (probably no surprise). The cost of living is 35% higher in Moscow than it is in NY. Another article says "rents in central Moscow can range from $10,000 to $20,000 per month."

6 comments:

Sarah said...

"The cost of living is 35% higher in Moscow than it is in NY."

Hardly. The cost of living for American expats is certainly somewhat higher in Moscow than it is in most other cities. But it is only those expats who insist on buying exactly the same goods they could get in NY for whom the cost of living is 35% higher in Moscow than it is in NY.

This kind of article always annoys because I think it's one of the things that contributes to Americans' relative unwillingness to travel and consequent ignorance of the world.

An example of the kind of reasoning that leads to the conclusion that foreign cities are so impossibly expensive is this: Say a Bud Lite costs $10 in the one Prague restaurant where it is sold*. In most American cities you can get it for $1. Ergo, beer in Prague is 10 times more expensive than in American cities. Add up similar goods-- McD's prices, etc. and voila-- a ridiculous conclusion in search of an unreflective, ethnocentric, untraveled mind... sort of like the minds possessed by many economists...

In fact, of course, anyone who's ever been to Prague knows that they can get the original, superb Czech Budweiser-- (the Czechs have been battling Anheuser Busch over the name, which is derived from the Czech city where it is brewed, for almost a century) for about 50 cents in any pub in town. And anyone who can still drink the American swill after a taste of the original simply has no taste buds.

But the easy availability in many cases of local alternatives of far superior quality is only part of the reason I find this whole comparison so annoying. It also reinforces the American economic view that markets are machines relating prices to value based on some sort of simple, logical-- and universal-- principle.

In fact, real markets-- even American ones-- are the social networks through which a society expresses its values-- rewarding contributions (physical, spiritual or intellectual) which it considers positive or good and punishing (by withholding compensatory rewards to varying degrees) whatever that society considers negative or bad. The simplistic money=good equation is distorting American values to an degree that most Americans themselves are uncomfortable with.

There is no reason to reinforce their fears of the outside world and inability to imagine that things could be different anywhere else by repeating these ridiculous price comparisons ad nauseum.

Any American who wants to travel to Moscow should spend some time meeting and talking to local Russians. If they haven't, within a matter of weeks, come away with a handful of invitations and a notebook of information that will allow them to visit for the same or less than a stay in New York would cost they need to take a hard look at how they interact with others.

* Disclaimer: there is no such restaurant as far as I am aware.

Cyril Morong said...

Sarah

Thank you for visiting my blog and writing a thoughtful and informed response. How did you come across it? Here is a quote from on of the articles (not all of those links I gave are still working)

"Mercer's annual Cost of Living Survey ranked 143 cities worldwide, gauging the comparative cost of more than 200 categories, including housing, transportation, food and entertainment. The survey is used to help multinational employers determine compensation for their expatriate employees."

So it is not jut beer or luxury apartments that they include.

Sarah said...

Cyril-

Thank you for the welcome, and apologies for the snark. I followed a link to your blog from Mark Thoma's blogroll.

I believe I remember taking a fairly careful look at what kinds of items that were included in the survey one year when my mother-in-law sent us a clipping from the Czech press that placed Prague high on the list. Of course it isn't all beer-- and not all of the high prices expats pay can be as easily avoided as my American vs. Czech beer example implies. Many Czechs, for instance are living in apartments which have been subsidized or price-controlled by the government in some way-- if not currently at least in the past. Renting a nice apartment in central Prague is not cheap. But even before I met my husband I never paid anywhere near the kind of rents this survey gives as 'average'. And the food costs given could only be achieved by insisting on Kellog's cornflakes for breakfast and Texas beef for dinner every day. Things like transportation are similarly skewed by American preferences: driving a car in Prague is very expensive. It's also very foolish, since 95% of the time public transportation will get you there much faster-- and won't leave you circling endlessly looking for a parking place either.

And that's another of my gripes... No way to put make a price comparison that would favor European cities vs. American ones because we simply don't have anything like the variety and quality of public goods that are routinely available elsewhere in the developed world...

But enough nostalgia for the Prague metro and Budvar beer (not to mention single-payer health care!) Back to the 'real world' of studying for my macro midterm.

Cyril Morong said...

Thanks for clarifying your thoughts on this issue. Good luck on your macro midterm. Are you a graduate student or an undergrad? Since you are interested in the topic of international costs of living, maybe you can write a senior thesis or graduate thesis on how accurate these kinds of studies, like the one done by Mercer, are. But don't ask me for any advice on it-I don't know much about it:).

prague accommodation said...

You have a great blog...

Cyril Morong said...

Prague

Thank you for that nice comment, especially coming from an Eastern European. Three of my grandparents were born in Poland and one was born in Russia. Glad you dropped by.

Cyril