In Swiss bank UBS's Global Cities Ranking 2018, employees in Luxembourg city hneed to work 13.1 minutes to be able to afford a Big Mac: Kong Kong tops that Working Time chart as the shortest time (11.8 minutes), followed by Taipei and Tokyo, with Nairobi the last out of 77 cities (133.8 minutes).
In Purchasing Power, Luxembourg (117.3) is 5th behind Los Angeles (123.9), Zurich (122.5), Miami (121.7) and Geneva (118.0) in Net Annual Income, with Lagos 77th (7.9).
Luxembourg, though, is 3rd in Earning Levels for Average Earnings at 111.3 (Gross), behind Geneva (131.5) and Zurich (129.8), and above Los angeles (101.7), Copenhagen (101.3) and Oslo (100.6), with Cario 77th on 4.7.
For Price Levels (including rent), Luxembourg is 11th most expensive at 84.2, in the list topped by Zurich (104.3), Geneva (102.9), New York (100.0), Oslo (96.9) and Copenhagen (94.4), with Cairo the cheapest at 29.8.
Survey Methodology
In compiling the data for analysis, UBS gathered more than 75,000 data points on prices and earnings from 77 cities worldwide, between January and April of this year.
To analyse prices, UBS created a standardised basket of 128 goods and services, which replicates the spending and consumption of a typical three-person European family. While consumer habits and preferences vary greatly from country to country, and from continent to continent, if products were not available in some cities, or deviated too far from our parameters, local representative substitutes were sometimes used.
To iron out any inconsistencies, individual items were weighted accordingly. The basket of goods and services accounts for almost 80% of the EU’s harmonized index of consumer prices (HCIP) this year. That figure is 52% when compared with the US CPI basket and 65% compared with the Singaporean Household Expenditure basket. Changes in consumer habits stemming from technological developments were accounted for by updated specifications for electronic products. The iPhone 6 from 2015, for instance, was replaced by an iPhone X.
Six new cities were included to make the data set more robust, namely Panama City, Lagos, Zagreb, St Petersburg, Riyadh and Hanoi. In each city, UBS worked closely with local experts who provided data points from supermarkets, real estate agents, grocery stores and other shops. These findings were compared with self-collected online data and refined its price index.
For the study's second main ingredient, earnings, UBS created a reference profile of 15 professions to represent the structure of the working population in Europe. UBS included profiles of workers of varying ages, family status, work experience and education levels.
UBS collected tax and social security information using PwC’s “Worldwide Tax Summaries,” supplemented by information from local tax authorities, and corroborated their results with survey participants. Taxes were averaged for each profession, weighted and then calculated as a percentage. Social security contributions of employees and employers were gathered from PwC and KPMG sources.
Net wages are calculated by deducting these social security contributions from gross wages and then subtracting taxes. Hourly wages in individual cities were calculated by dividing average annual gross or net wages by the average number of hours worked per year.
