Livable Cities Rankings: Quality of Life Has Its Price

Vilnius (vilnius-hotel.lt)By Renard Teipelke

I am sure combined rankings exist. Rankings where cities are evaluated and scored for both their quality of living and their cost of living. But generally, the leading rankings of “livable cities” do not concern themselves much with cost factors. One indirect reason might be that it is probably the jetsetting expat who is most interested in such rankings and s/he is most often remunerated well enough to not care too much about the average price of a sandwich or a cab ride or a doctor’s visit. The first two might fall under business travel expenditures anyhow and the last item is covered by expats’ global health insurance.

But accounts of a city’s livability (which in itself is a highly contested matter, see here and here) is actually most relevant to a city’s residents, as they are the ones who are living there “full time”. Therefore, a livability ranking needs to be combined with a cost of living perspective, if a certain ranking’s methodology does not already include related factors. In short: A truly livable city does not only provide the natural, social, and economic features that make it worthwhile and enjoyable to live in; it does also offer the financial conditions for its (current/future) residents to afford these features.

Therefore, I took a crack at the well-known Mercer cities rankings. You can find their cities list for quality of living here and their cities list for cost of living here. I combined the two rankings working with the rank/position of each city in the rankings (not their scores) – you can find the results for the top 15 quality of living cities in comparison to their cost of living rank in the table below (top ranks in the quality of living refer to a [positive] high livability, while top ranks in the cost of living refer to [negative] high living costs).

Livable Cities Rankings_27 Jan'16 - List

I then took the ranks and included a cost quotient (based on the cost of living rank of a city) in the quality of living ranking. In the table below you can find the results of this computation for the top 15 quality of living cities, with the lines in-between highlighting the Vienna case and all cities which significantly moved up or down the list.

Livable Cities Rankings_27 Jan'16 - Ranks

As becomes quickly apparent, Vienna (Austria) manages to be No. 1 in both the quality of living ranking and the cost-weighed quality of living ranking. The cities of Vancouver and Toronto (Canada), Berlin (Germany), and Wellington (New Zealand) move up several ranks when cost of living is factored into the quality of living ranking. Not surprisingly, the high-ranked quality of living cities Zurich and Geneva fall down to join Bern (all Switzerland) at the end of the cost-weighed ranking. A somewhat lower rank is assigned to Copenhagen (Denmark) when cost of living factors are included. Other cities from Germany, New Zealand, and the Netherlands change their rank only slightly.

Now, what do we conclude from this? I guess a more comprehensive look at the whole ranking (going through all positions from 1 to 230) helps, because otherwise we just see how the cities with the best quality of living are reordered in another exclusive list. For sure, Vienna keeping the first rank is already interesting. And the rise of some cities might hint at reconsidering city comparisons that are so easily done at after-work parties and on airplanes (…expats…). But let us look at the whole picture and see what happens. (A couple of (partly well-known) cities are unfortunately missing in either of the two Mercer rankings and are, thus, omitted in the combined list – see far below for the complete list).

The 50 best cost-weighed livable cities (combined ranking, see table below) do not show too many surprising results and changes amongst the first ranks. However, there are a number of cities that move up by 12, 34, or even more than 50 ranks. There is, for example, Nuremberg (Germany) that is No. 12 in the cost-weighed quality of living ranking. Or Lisbon (Portugal) that jumps from rank 41 to 21. The list goes on with several other well-known candidates of livable cities that seem to score by being less expensive for living than their “competitors”; for instance, Leipzig (Germany) jumping from 59 to 25, Budapest (Hungary) jumping from 75 to 30, Warsaw (Poland) jumping from 79 to 32, or Cape Town (South Africa) jumping from 91 to 33. It is particularly a group of Eastern European cities that benefits from a cost-weighed quality of living ranking (see table below). When I took a look at the Top 50 I was reminded of an older blog post where I discussed the potential strengths and advantages of such “global second-row status” cities (here).

Livable Cities Rankings_27 Jan'16 - Ranks_extended

However, having a city like Tunis (Tunisia) now ranked amongst the 50 “most-livable-still-affordable” cities might hint at a weakness of this computation, which is also confirmed when you identify the biggest winners in the combined ranking. These cities jump 60 to nearly a 100 positions in the cost-weighed ranking, but hardly any of them are amongst the better half of livable cities. Thus, the cost advantage of cities like Harare (Zimbabwe), Minsk (Belarus), or Karachi (Pakistan) does not make them so much better places to live in. What’s the low cost of services and amenities good for, when you cannot access them due to their unavailability?!

Livable Cities Rankings_27 Jan'16 - Ranks_biggest winners

Looking at the biggest losers in the cost-weighed quality of living ranking reveals no surprises: The big metropolises, such as Singapore (Singapore), Tokyo (Japan), London (UK), New York City (USA), and Seoul (South Korea), fall down more than a 100 ranks due to their extraordinary high cost of living. This pretty much resembles the everyday struggles of millions of residents in these (and similar) cities, where some livability features can be jointly enjoyed, while many others are only affordable to a small(er) group of residents and visitors.

Livable Cities Rankings_27 Jan'16 - Ranks_biggest losers

Accepting the likely conceptual and methodological flaws within such cities rankings (as well as in my tampered cross-computation), I find a cost-weighed quality of living ranking more realistic and relevant than those glitzy quality of living rankings that somehow assume a resident’s ability to access the livability features with ease. The results at the top and bottom of the list (see below) are, however, less revealing than the group of second-best cities, positions 26-50. These cities are performing an interesting role in the (perceived) international city competition and require further attention.

Mercer Quality of Living Ranking 2015 Mercer Quality of Living Cost-Weighed Ranking 2015 Difference
Vienna 1 1 0
Vancouver 5 2 3
Munich 4 3 1
Auckland 3 4 -1
Dusseldorf 6 5 1
Frankfurt 7 6 1
Ottawa 16 7 9
Toronto 15 8 7
Hamburg 16 9 7
Berlin 14 10 4
Wellington 12 11 1
Nurnberg 25 12 13
Stuttgart 21 13 8
Amsterdam 11 14 -3
Montreal 24 15 9
Stockholm 19 16 3
Luxembourg 19 17 2
Brussels 22 18 4
Calgary 33 19 14
Lyon 39 20 19
Lisbon 41 21 20
Barcelona 38 22 16
Sydney 10 23 -13
Melbourne 16 24 -8
Leipzig 59 25 34
Copenhagen 9 26 -17
Adelaide 27 27 0
Seattle 44 28 16
Pittsburgh 54 29 25
Budapest 75 30 45
Madrid 51 31 20
Warsaw 79 32 47
Cape Town 91 33 58
Perth 22 34 -12
Canberra 30 35 -5
Vilnius 79 36 43
Helsinki 31 37 -6
Ljubljana 75 38 37
Port Louis 82 39 43
Prague 68 40 28
Johannesburg 94 41 53
Belfast 63 42 21
Glasgow 55 43 12
St. Louis 67 44 23
Minneapolis 60 45 15
Boston 34 46 -12
Limassol 87 47 40
Tunis 113 48 65
Brisbane 37 49 -12
Tallinn 88 50 38
Detroit 70 51 19
Zagreb 97 52 45
Paris 27 53 -26
Bratislava 81 54 27
Monterrey 109 55 54
Sofia 115 56 59
Bucharest 110 57 53
Pointe-a-Pitre 69 58 11
Athens 85 59 26
Atlanta 66 60 6
Windhoek 133 61 72
Birmingham 52 62 -10
Rabat 116 63 53
Zurich 2 64 -62
Asuncion 114 65 49
Honolulu 36 66 -30
Dublin 34 67 -33
Aberdeen 57 68 -11
Houston 64 69 -5
Brasilia 107 70 37
Belgrade 141 71 70
San Francisco 27 72 -45
Kuala Lumpur 84 73 11
Nagoya 61 74 -13
Gaborone 144 75 69
Milan 41 76 -35
Skopje 159 77 82
Bangalore 146 78 68
La Paz 156 79 77
Riga 89 80 9
Dallas 62 81 -19
San Juan 72 82 -10
Oslo 31 83 -52
Santo Domingo 135 84 51
Sarajevo 161 85 76
Lusaka 149 86 63
Kolkata 160 87 73
Quito 129 88 41
Managua 173 89 84
Rome 52 90 -38
Bogota 131 91 40
Muscat 104 92 12
Banjul 184 93 91
Panama City 95 94 1
Casablanca 128 95 33
Kampala 169 96 73
Mexico City 126 97 29
Tirana 180 98 82
Montevideo 78 99 -21
Minsk 189 100 89
Blantyre 177 101 76
Yerevan 183 102 81
Kiev 176 103 73
Chennai 151 104 47
San Jose 106 105 1
Tegucigalpa 184 106 78
San Salvador 172 107 65
Kingston 156 108 48
Tbilisi 194 109 85
Karachi 202 110 92
Washington, D.C. 50 111 -61
Bishkek 208 112 96
Guatemala City 150 113 37
Islamabad 191 114 77
Lima 124 115 9
Colombo 132 116 16
Chicago 43 117 -74
Algiers 187 118 69
Kuwait City 125 119 6
Doha 108 120 -12
Jeddah 166 121 45
Dar es Salaam 198 122 76
St. Petersburg 174 123 51
Miami 65 124 -59
New Delhi 154 125 29
Harare 206 126 80
Istanbul 122 127 -5
Addis Ababa 205 128 77
Tashkent 206 129 77
Nouakchott 221 130 91
Bandar Seri Begawan 102 131 -29
Santiago 93 132 -39
Los Angeles 48 133 -85
Cotonou 182 134 48
Phnom Penh 195 135 60
Niamey 217 136 81
Ouagadougou 215 137 78
Jakarta 140 138 2
Lome 204 139 65
Cairo 170 140 30
Manama 130 141 -11
Bern 13 142 -129
Geneva 8 143 -135
Ashkhabad 210 144 66
Ho Chi Minh City 153 145 8
Rio de Janeiro 119 146 -27
Nairobi 186 147 39
Hanoi 154 148 6
Osaka 58 149 -91
Manila 136 150 -14
Bamako 219 151 68
Almaty 175 152 23
Maputo 178 153 25
Port of Spain 147 154 -7
Kigali 189 155 34
Dakar 162 156 6
Taipei 83 157 -74
Mumbai 152 158 -6
Amman 122 159 -37
Riyadh 163 160 3
Abu Dhabi 77 161 -84
Douala 196 162 34
Bangkok 117 163 -46
Accra 165 164 1
New York City 44 165 -121
Noumea 111 166 -55
Sao Paulo 120 167 -47
Yaounde 192 168 24
Dubai 74 169 -95
London 40 170 -130
Moscow 167 171 -4
Dhaka 211 172 39
Djibouti 188 173 15
Abidjan 209 174 35
Tel Aviv 105 175 -70
Tokyo 44 176 -132
Beirut 181 177 4
Chengdu 133 178 -45
Buenos Aires 91 179 -88
Nanjing 137 180 -43
Brazzaville 224 181 43
Libreville 164 182 -18
Victoria 96 183 -87
Baku 197 184 13
Abuja 213 185 28
Qingdao 147 186 -39
Singapore 26 187 -161
Yangon 201 188 13
Shenyang 156 189 -33
Guangzhou 121 190 -69
Seoul 72 191 -119
Shenzhen 139 192 -53
Conakry 222 193 29
Lagos 211 194 17
Tehran 203 195 8
Shanghai 101 196 -95
Beijing 118 197 -79
Kinshasa 223 198 25
N’Djamena 226 199 27
Hong Kong 70 200 -130
Luanda 200 201 -1

 

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6 Responses to Livable Cities Rankings: Quality of Life Has Its Price

  1. Interesting stuff. Yet when cost-of-living and quality of life is cross-computed, I’d expect checks and balances on tax level and salary level as well. Cities like Copenhagen and Stockholm has very high costs of living, high quality of life, high tax levels and high salary levels. So in the end this cross-computing might only serve to filter out the extremes, and those extremes are in my opinion signified by incredible inequality. So, to put it short, inequality could be added as one of the checks and balances as well.

    • Good points. Cross-computing two indices from the same source (which is already better than mixing different sources) is, at first, a thought experiment only to add a certain degree of quantitative analysis to an otherwise qualitative argument. Mercer writes about their methodology for cost-of-living that they take the “comparative cost of more than 200 items in each location” (https://www.imercer.com/products/cost-of-living.aspx) – that would not account for different salary levels for the exact same job in place A and B, true. Regarding tax levels: This would probably require a comparison of above-municipal level in many cases where various taxes are set by state or national governments. A worthwhile analysis that definitely goes beyond the scope of the research for a blog article.
      It may be easier to not aim for an overall comparison, but to take a representative (or stereotypical) job from each income latter (e.g. janitor, office assistant, project manager, business director, …) and compare within the job category across cities. Although going beyond national borders for comparison may in practical terms be not relevant for most employees who cannot move freely/easily from Place A to B just because of lower cost of living/higher quality of life.

  2. How does it compare with BIGMAC Index.

    • Difficult question. I originally was looking at the Big Mac Index etc., but they were either not available for city comparisons or they were limited in their methodology even more than the Mercer indices are. In addition, cross-computing across different indices, methodologies, and sources is even shakier for an argument. What is better about time-based purchasing power ratio indices like the Big Mac Index is that they provide a somewhat better insight into the worth relationship of work-money-costs.

  3. OMG…This is my “Holy Grail”…I’ve always wanted to do a study of “quality of life” vs “cost of living”…and now here it is !!!

    Do you have a Twitter account so that I may Follow you ???

    • No, but I will probably have another article ready that will further investigate quality of life and other urban development concerns versus needs of different socioeconomic groups in cities 🙂

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