Someone told me Moscow was a brutally expensive city. And that Tokyo might be the most expensive to live in of all.
Ok, why? What is so special about Moscow? Tokyo at least is on an Island. But even so, why?
I don’t know about Tokyo, but I’ve always been a bit :dubious: about the Moscow claims. If you are trying to replicate exactly your current lifestyle, buying the same brands, eating at the same kinds of restaurants, etc., then, yeah, Moscow is pricy. But when I visited friends who lived there, and we ate and drank and traveled like locals would, it was not at all that dear. I found it far less expensive than comparable Western European capital cities.
This is true, but going there as a tourist and hanging with the locals only replicates local life to a limited extent, financially speaking. A big reason that Moscow is so expensive, and one that you would not have noticed, is that dwellings tend to be very expensive. The reason for this is that everyone and their mother tries to move to Moscow, so dwellings are in high demand, but at the same time new houses are being built only very slowly, in part because the climate is such that conditions for building are not great for a large part of the year. As a result, families live in tiny apartments, and young people take forever to move out, because they just can’t afford to do so.
I’ve heard it, it’s usually dealing with the cost of real estate. I suppose if you spent a lot of money on shoe shines or prostitutes then Moscow may not be very expensive.
Real estate is very expensive in places like Moscow and London because the economic and political power of those respective countries are overwhelmingly concentrated in those places and the country is essentially divided into “Rome” and “everywhere else” with nothing in between. By contrast wealth and power and indeed economic activity in general in the US isn’t nearly as concentrated. One could be a towering captain of industry in Manhattan, the SF Bay Area, Los Angeles, and even do pretty well in 2nd tier rich cities like Seattle, Houston or San Diego.
Make no mistake, Tokyo is an expensive place to live in. However, in my experience, the claims that it is the most expensive place in the world is unconvincing. A lot of the studies that are presented as cost of living studies are in fact cost of living for expatriate employee studies. Almost always the strength of the currency will be a major factor. Right now, the yen is crazy strong, but that is an issue only if your money comes from abroad. For someone working and living in Tokyo, that’s not a problem.
Regardless of where you are, housing is usually your major expense but several cost of living studies specifically exclude it. Housing in Tokyo is expensive, for sure, but the same thing is true for other major cities like New York and London.
Lastly, and this is my biggest objection, some studies make no effort to account for culture. For example, IIRC, one study that found Tokyo the most expensive place to go out did so by looking at what it cost to have a steak dinner and a bottle of vodka. Well, yes, of course, but that’s not what people do when they go out in Tokyo. As a matter of fact, as far as major cities go, eating out in Tokyo is actually quite affordable. For equivalent quality, it trounces New York, Paris or London price-wise. Just don’t go eat steak.
Actually, the most expensive places where humans currently live are:
[list=#][li]International Space station[/li][li]Antarctica stations (Amundsen-Scott , McMurdo, Bellingshausen, etc.)[/li][li] … any cities would come after here.[/li][/list]
On of my former roommate lives there, so I talked to him about rent prices extensively. They weren’t that bad if you were making a foreign salary. Something around $800-$1000/month for a one-bedroom, which is not crazy expensive for a big city.
According to this study in 2010, the average rate for a Moscow apartment was $11,000/year, which is about $920/month. Yes, that’s expensive for someone making an average Russian salary. Quite so. But when this sorts of “most expensive cities in the world” stuff gets thrown around, it’s not usually defining “expensive” as cost-of-living in proportion to average local wages. They’re usually through the perspective of an expat, and I somewhat disagree with the methodology used to come to those conclusions.
This site for expats seems to come to more sensible numbers that I could agree with. Entering Chicago and Moscow, it says that Moscow is 16% cheaper than Chicago. Comparing New York to Chicago, it’s 28% more expensive. Putting in London and Chicago, I get 30%. These numbers more closely reflect my personal experience with those places.
That’s a nice site, but it still has the same problem as the other studies. For instance, if I compare Tokyo to New York, it tells me that Tokyo is 25% more expensive. Food is 21% more expensive. Let’s look at the details, though.
Item Tokyo NY
Daily menu in the business district ¥1,035 ($13.29) $14.36 -7%
Combo meal in fast food restaurant ¥622 ($7.99) $6.82 +17%
1/2 Kg (1 lb.) of chicken breast ¥480 ($6.16) $4.98 +24%
1 liter (1 qt.) of whole fat milk ¥214 ($2.74) $2.78 -1%
12 eggs, large ¥311 ($3.99) $3.53 +13%
1 kg (2 lb.) of tomatoes - $4.83 -
500 gr (16 oz.) of local cheese ¥506 ($6.49) $6.23 +4%
1 kg (2 lb.) of apples ¥671 ($8.61) $3.64 +137%
2 kg (4,5 lb.) of potatoes ¥575 ($7.38) $3.93 +88%
0.5 l (16 oz) beer in the supermarket ¥266 ($3.41) $2.51 +36%
1 bottle of red table wine, good quality ¥2,300 ($30) $18.89 +56%
2 liters of Coca-Cola ¥221 ($2.84) $2.17 +31%
bread for 2 people for 1 day ¥228 ($2.93) $2.53 +16%
It’s clearly imposing an american lifestyle. Cheese but no tofu? Potatoes but no daikon?
Even if you compared the average shopping cart in Tokyo to that in New York, Tokyo may still come out more expensive, but the chart above won’t tell you that. The same thing is true for clothing. They mention Zara but not Uniqlo? You can get a pair of jeans for ¥1000 in Tokyo, you don’t have to do for the ridiculously expensive Levi’s. I especially liked “standard men’s haircut in expat area of the city”. Lastly, of course, all those figures are largely irrelevant if you insist on comparing different currencies and don’t factor in actual average incomes.
I do agree with your critiques (and mentioned it somewhat obliquely in my first post on this topic.) I brought up that website because it’s the first and only expat cost-of-living calculator I’ve seen that gives numbers that somewhat represent my experiences in those places. Still, for the reasons you’ve stated, those numbers also have their problems.
Yeah, the exchange rate is the real killer. If you compare within the same country, it’s probably quite accurate.
Anyway, I criticized a lot but didn’t bother answering the op. The reasons why the cost of living is high in Tokyo are:
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Strong yen. Like I wrote a few times above, that’s only relevant if your income comes from outside of Japan. Right now 1 USD is 78 JPY. It wasn’t all that long that you could get over 110 JPY per USD. That hurts a lot.
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High population density. Most of Japan is mountains; something like 10% of the country is actually habitable or arable. Since space is at a premium, real estate prices are much higher than countries with more land. Limited arable land also leads to higher food prices. You don’t have the economy of scale that you get in a place like the American midwest. Furtehrmore, in order to protect local producers very high tariffs are imposed on many agricultural products.