World's Most Expensive Cities To Live

Think your morning commute is expensive? Think again. The ride on a bus or subway in Tokyo costs $3.25. Grab a newspaper and a cup of coffee on the way and the total comes to $11.70. That's more than anywhere else in the world--24% more than what those same things cost in New York, even.

Tokyo is the world's most expensive city, according to Mercer's 2009 Worldwide Cost of Living survey released today, with the cost of living up 13.1% from 2008; the city ranked at No. 2 in 2008's survey. Japan's capital is followed by Osaka and Moscow, which held the top spot in last year's rankings. Geneva comes in fourth.

The significant changes from last year are due to massive swings in exchange rates, with many currencies at their weakest in years against the U.S. dollar, during the March 2009 survey period. Because of this, New York moved up 14 spaces to No. 8 from No. 22. London dropped to No. 16 from No. 3 as the pound dropped as low as 1.37 against the U.S. dollar during the study period. Six months earlier, one pound was worth $1.86.

"Changes in exchange rate tend to be one of the major drivers, I would argue the major driver, in cost of living," says Rebecca Powers, a principal consultant at Mercer. Even with the U.S. dollar weakening over the past four months--it's now worth $1.65--due in part to the Obama administration's stimulus package, the cost of living in London, when measured against the value of the U.S. dollar, is significantly lower than it was a year ago, when the pound was worth more than $2.

Other notable jumps from last year's ranking to this year's are Dubai, which moved to No. 20 from No. 52, and Caracas, which moved to No. 15 from No. 89. Both climbed so quickly because the local currencies are pegged to the greenback; the more the dollar's value increased, so did the cost of living in those places (but Caracas also has a high rate of inflation, pushing up prices for basic goods).

All U.S. cities included in the ranking also experienced a rise, including Los Angeles, up 32 places, and Washington, D.C., up 41 places.
Behind the Numbers

To generate its ranking of the world's most expensive cities, Mercer, an international consulting firm, looked at more than 200 cities across six continents, examining the cost of over 200 items in each location, including housing, food, clothing, transport, household goods and entertainment to calculate an overall cost of living. The survey is used to help multinational companies determine compensation packages for employees living abroad. Mercer uses New York as the base city for the index and scores the cost of living there at 100 points. Cities scoring higher are more expensive; lower than 100, and they're cheaper. All cities included in the ranking are in comparison to New York, and currency is measured against the U.S. dollar.

"Since we're polling those places in a local environment, we're getting costs in a local currency," Powers says. "When the currencies fluctuate, that has a significant affect on costs." Powers says these cost fluctuations are making multinational companies reassess the need for expansion abroad.

"Companies have been much more guarded about their investments," she says. "While you can still argue that there is interest in emerging markets, the general pattern of money flowing into the same markets was interrupted when companies started looking at their money."

Johannesburg, South Africa (No. 143) bottoms out the complete list of cities with a score of 49.6. Also at the tail end are Monterrey, Mexico (No. 142), and Asuncion, Paraguay (No. 141).
Tokyo Steady, Shaky Everywhere Else

The main constant in these rankings, since Mercer's first set was released in 1994, is Tokyo's place at or close to the top. Osaka has only fallen outside the top 10, once, when it slipped to the No. 11 spot last year. While the value of the yen is strong against the dollar, Japan--and Tokyo in particular--has always featured prominently due to the high cost of international goods, says Mercer senior researcher Nathalie Constantin-Metral. One can count on Japan being expensive in good times and bad alike for the yen.

But there's no telling what will happen in a place like Moscow--which zoomed up to the top spot last year, and fell out of it this year. It will all depend, says Constantin-Metral, on the performance of Russia's currency. The ruble had been on a long, steady climb against the greenback as of March 2008; but it bottomed out at the beginning of March 2009. It's been on a recovery trajectory ever since, but still has a long way to go. Either way, the rankings make clear that the more the ruble slips, the less expensive a city Moscow becomes.

American cities, then, have more in common with a place like Moscow than anywhere in Japan. The more the dollar--and prices--move, the more or less expensive U.S. cities get, which means it's all up in the air as to what will happen over the year ahead. Tokyo and Osaka may be expensive, but at least everyone knows it for certain. Just about everywhere else, it seems, nobody knows for sure what the cost of living is like until the year is already in the rear-view mirror.
World's Top Five Most Expensive Cities To Live

1. Tokyo, Japan

2. Osaka, Japan

3. Moscow, Russia

4. Geneva, Switzerland

5. Hong Kong

forbes.com

Bottled Water Unsafe to Drink?

Consumers know less about the water they pay dearly for in bottles than what they can drink almost for free from the tap because the two are regulated differently, congressional investigators and nonprofit researchers say in new reports.

Both the Government Accountability Office and the Environmental Working Group, a nonprofit research and advocacy organization, recommend in reports released Wednesday that bottled water be labeled with the same level of information municipal water providers must disclose.

The researchers urged Americans to make bottled water "a distant second choice" to filtered tap water because there isn't enough information about bottled water. The working group recommends purifying tap water with a commercial filter, however.

Both reports were released at a congressional subcommittee Wednesday morning.

Bottled water — an industry worth about $16 billion in sales last year — has been suffering lately as colleges, communities and some governments take measures to limit or ban its consumption. As employers, they are motivated by cost savings and environmental concern because the bottles often are not recycled.

Bottled water sales were growing by double-digit percentages for years and were helping buoy the U.S. beverage industry overall. But they were flat last year, according to trade publication Beverage Digest.

Beverage Digest editor John Sicher said some consumers are turning on the tap during the recession simply because it's cheaper.

From 1997 to 2007, the amount of bottled water consumed per person in the U.S. more than doubled, from 13.4 gallons to 29.3 gallons, the GAO report said.

The issue before a subcommittee of the Energy and Commerce Committee was less about waste and water quality concerns and more about the mechanics of regulating bottled water.

As a food product, bottled water is regulated by the Food and Drug Administration and required to show nutrition information and ingredients on its labels. Municipal water is under the control of the Environmental Protection Agency.

The two agencies have similar standards for water quality, but the FDA has less authority to enforce them, the GAO said, and the environmental agency requires much more testing.

Subcommittee chairman Rep. Bart Stupak, D-Mich., said the subcommittee was requesting information Wednesday from a dozen bottled water companies on their water sources, treatment methods and two years' results of contaminant testing. It was not immediately clear which companies were being contacted.

"Consumers may not realize that many regulations that apply to municipalities responsible for tap water do not apply to companies that produce bottled water," he said in statements opening the hearing.

The GAO noted the FDA has yet to set standards for DEHP, one of several chemicals known as phthalates that are found in many household products, while the EPA limits the presence of phthalates in tap water.

In a survey of officials in all 50 states and the District of Columbia, the GAO found they think consumers are misinformed about bottled water.

"Many replied that consumers often believe that bottled water is safer or healthier than tap water," according to the GAO report.

The Washington, D.C.-based Environmental Working Group said in its report that consumers do not get enough information to determine which water is best for them.

Both groups said some bottled water brands include the same information required of tap water providers on either labels or company Web sites.

The GAO called for more research but said the FDA should start by requiring that bottled water labels tell consumers where to find out more.

Community water systems must distribute annual reports about their water's source, contaminants and possible health concerns.

Consumers should know where all their water comes from, how it is treated and what is found in it, said Richard Wiles, senior vice president for policy and communications for the Environmental Working Group.

"If the municipal tap water systems can tell their customers this information, you would think that bottled water companies that charge 1,000 times more for this water could also let consumers know the same thing," he told The Associated Press.

The bottled water industry's trade group, the International Bottled Water Association, planned to testify Wednesday that the product, — subject to the same regulation as other soft drinks, teas, juices and other beverages — is safe. Additional standards apply for bottled water products labeled as "purified water" or "spring water," among other labels, because they must prove a connection to those sources, according to planned testimony from Joseph Doss, president and chief executive of the International Bottled Water Association.

Doss said consumers can learn about bottled water by contacting the company, reading its Web site and visiting sites run by state governments.

State safeguards for bottled water often exceed the federal, though they are less stringent than for tap water, the GAO wrote.

The trade group declined to comment on the reports before they are released.


Yahoo news