For this weeks elective post I am going to have another stab at last week’s Comparative Measurements assignment. Now that I have a better idea of what it is that I am supposed to do, I will compare two methods of measuring the worldwide city cost of living index. One is conducted through the Economist Intelligence Unit (EIU) and the other is by Mercer. They are both conducted very similar but of the two I am partial to Mercer’s approach.
The Mercer Index measures the cost of living for expats living 214 of the world’s largest cities. It is geared to the needs multinational corporations that need to know the relative cost of living for employees living abroad. Because of this, the Mercer report only measures the cost of living for expats living in the city. The index compares the prices of over 200 items including clothing, housing, entertainment, and transportation. The index uses New York City long with American currency as its baseline. The study is concerned primarily with two factors, currency fluctuation and price movement, both vis-à-vis New York City.
The EIU index is very similar it is also concerned with expats but only measures the largest 140 cities. The index measures the selling prices of 160 retail items from groceries to luxury goods and also includes a basic salary calculator to factor in taxation, accommodation and savings.
I like the Mercer index because it seems to be slightly more comprehensive. However the two indexes latest reports have produced different results. The EIU is vague on what exactly the “basic salary calculator” is and neither report goes into any detail of how much weight is given to each variable.
This is really interesting. Both organizations compare the Quality of Life across different cities and this is what I focused on in the post I wrote for this assignment. I also like the Mercer approach because it does seem more comprehensive and transparent (they disclosed more about the indicators they use for the quality of life index) but I find that this is ultimately the problem with organizations like this doing rankings. They sell this data and these reports to people therefore that keep their formulas and exact variables secret. As a result its very difficult, if not impossible to replicate their work. This is understandable. If I were the EIU, I would make sure I keep my detailed methodology and data secret because this is how I pay the bills. But from the scientific standpoint this makes it really hard to evaluate these rankings.