ECA's ranking is based on a basket of 128 goods that includes food, daily goods, clothing, electronics, and entertainment, but not rent, utilities, and school fees, which are not typically included in a cost-of-living adjustment. ECA researchers and local partners gathered prices in September 2009 and March 2010 for domestic and imported brands that are internationally recognized such as Kellogg's cereal or Sapporo beer. While lower-priced goods and services are available in these markets, the study estimated the cost of supporting the standard of living expected by expatriate employees, says Lee Quane, ECA's regional director for Asia. Some of the cities, such as Seoul and Stockholm, jumped up in the ranking as the local currency strengthened against the U.S. dollar. Quane says that while a slowdown in business may tempt employers to scale back compensation, "recessions only last so long" and retaining top talent in these places is critical to companies' success when the global economy recovers.10 World's Most Expensive Cities 20101. Tokyo, JapanRank in 2009: 2Food: Lunch at a restaurant: $18Can of beer from grocer: $3.37One kg of rice: $8.47One dozen eggs: $3.78Entertainment: Movie ticket: $22Appliances: Washing machine: $879The strength of the yen has brought Tokyo back to the No. 1 spot on ECA International's ranking for the first time since 2005. In addition to the costs above, rent for a two-bedroom apartment for expats is typically more than $5,000 per month in Tokyo, according to data from EuroCost International. While visitors need more pocket money here than in any other city, the monthly consumer price index in Tokyo's wards has actually dropped year-on-year for 14 straight months as of May 2010, based on figures from Japan's statistics bureau.
2. Oslo, NorwayRank in 2009: 8Food: Lunch at a restaurant: $43Can of beer from grocer: $4.71One kg of rice: $5.66One dozen eggs: $6.72Entertainment: Movie ticket: $16Appliances: Washing machine: $880Oslo rose above Copenhagen as the most expensive city in Europe when the kroner strengthened against other currencies. ECA International says an upward trend in oil prices, a short recession, and Norway's reputation as a safe haven for investors contributed to the kroner's rise.
3. Luanda, AngolaRank in 2009: 1Food: Lunch at a restaurant: $47Can of beer from grocer: $1.62One kg of rice: $4.73One dozen eggs: $4.75Entertainment: Movie ticket: $13Appliances: Washing machine: $912Angola's capital slipped to third place this year as the kwanza depreciated. Prices in Luanda have actually increased in the past year, but currency changes offset any inflation, according to ECA International. In addition to everyday goods, EuroCost International estimates that the average expat pays more than $3,500 per month for a two-bedroom flat in Luanda.
4. Nagoya, JapanRank in 2009: 3Food: Lunch at a restaurant: $19Can of beer from grocer: $3.08One kg of rice: $9.14One dozen eggs: $3.33Entertainment: Movie ticket: $20Appliances: Washing machine: $621Japan's fourth most populous city, Nagoya is also among the country's most expensive. The city ranks No. 1 for the cost of rice: $9.14 per kilogram, according to ECA International data. As Japan's auto hub, the Nagoya area is an important center of business: about 44 percent of automobiles produced in Japan are made here, according to the Greater Nagoya Initiative Center. Such companies as Toyota, Honda, Suzuki, Mitsubishi, Volkswagen, and General Motors have headquarters, manufacturing operations, or distribution points in the Nagoya region.
5. Yokohama, JapanRank in 2009: 4Food: Lunch at a restaurant: $17.39Can of beer from grocer: $3.26One kg of rice: $6.54One dozen eggs: $3.72Entertainment: Movie ticket: $19.50Appliances: Washing machine: $630About half an hour by commuter train from Tokyo, this port city has active shipping, biotechnology, and semiconductor industries. Yokohama is one of the world's most expensive cities, but companies here enjoy lower operating costs compared with the nearby capital. Nissan opened a new headquarters in Yokohama this year and reportedly will sell its office in Tokyo to cut costs.
6. Stavanger, NorwayRank in 2009: 14Food: Lunch at a restaurant: $33Can of beer from grocer: $4.76One kg of rice: $5.71One dozen eggs: $6.34Entertainment: Movie ticket: $15.50Appliances: Washing machine: $749This small seaside city earned its riches from oil in the North Sea and has become known as Norway's petroleum capital. Stavangerexpats.com says food expenses in Norway are about 50 percent higher than the EU average: A can of soda is about $2.80, and a beer at a bar can be $12.
7. Kobe, JapanRank in 2009: 6Food: Lunch at a restaurant: $16Can of beer from grocer: $3.09One kg of rice: $8.57One dozen eggs: $2.81Entertainment: Movie ticket: $20Appliances: Washing machine: $470The city has one of Japan's largest ports and has become home to many heavy machinery, iron and steel, and food product companies. According to the Japan External Trade Organization, 117 foreign and foreign-affiliated companies have offices in Kobe. As the price of Kobe beef, the style of high-grade meat named after the city, suggests, food is costly here, as are other living expenses.
8. Copenhagen, DenmarkRank in 2009: 7Food: Lunch at a restaurant: $36Can of beer from grocer: $2.10One kg of rice: $4.85One dozen eggs: $6.99Entertainment: Movie ticket: $15Appliances: Washing machine: $1,196A 2009 "survey" of 73 international cities by UBS found that employees in Copenhagen have the highest income. Places with higher salaries often have higher prices, but residents here enjoy good living standards overall. Some examples of the cost of living: Renting a DVD costs about $8 per night, a pair of women's jeans is more than $150, and a one-way ticket on public transport costs about $3.70.
9. Geneva, SwitzerlandRank in 2009: 9Food: Lunch at a restaurant: $30Can of beer from grocer: $2.02One kg of rice: $3.81One dozen eggs: $7.64Entertainment: Movie ticket: $16Appliances: Washing machine: $1,304Geneva, home to many companies and U.N. organizations, is one of the most expensive cities for food and household appliances. Food prices in Switzerland are 45 percent more expensive than in the rest of Western Europe, and the cost of electronics and appliances in Geneva is among the highest worldwide, according to a 2009 UBS report.
10. Zurich, SwitzerlandRank in 2009: 10Food: Lunch at a restaurant: $25Can of beer from grocer: $2.01One kg of rice: $3.36One dozen eggs: $5.81Entertainment: Movie ticket: $16Appliances: Washing machine: $974Zurich, Switzerland's largest city, is the country's main business center and the headquarters city for many financial companies, including UBS and Credit Suisse. Although Zurich had the greatest number of company bankruptcies in Switzerland last year, according to Dun & Bradstreet, the inflation rate started to increase again this year after falling in 2009.