A new index to measure cost of living for expatriates in cities

2018 ◽  
Vol 28 (3) ◽  
pp. 295-317
Author(s):  
Khee Giap Tan ◽  
Nguyen Trieu Duong Luu ◽  
Le Phuong Anh Nguyen
Keyword(s):  
New York ◽  
Hong Kong ◽  
Quality Data ◽  
Cost Of Living ◽  
Content Type ◽  
Goods And Services ◽  
Commercial Research ◽  
The Cost ◽  
Cost Of Living Index ◽  
The City

Purpose Cost of living is an important consideration for the decision-making of expatriates and investment decisions of businesses. As competition between cities for talent and capital becomes global instead of national, the need for timely and internationally comparable information on global cities’ cost of living increases. While commercial research houses frequently publish cost of living surveys, these reports can be lacking in terms of scientific rigour. In this context, this paper aims to contribute to the literature by formulating a comprehensive and rigorous methodology to compare the cost of living for expatriates in 103 world’s major cities. Design/methodology/approach A cost of living index for expatriates composed of the ten consumption categories is constructed. The results from the study covers a study period from 2005 to 2014 in 103 cities. More than 280 individual prices of 165 goods and services have been compiled for each city in the calculation of the cost of living index for expatriates. New York has been chosen as the base city for the study, with other cities being benchmarked against it. A larger cost of living index for expatriates implies that the city is more expensive for expatriates to live in and vice versa. Findings While the authors generate the cost of living rankings for expatriates for 103 cities worldwide, in this paper, the authors focus on five key cities, namely, London, Hong Kong, Singapore, Tokyo and Zurich, as they are global financial centres. In 2013, the latest year for which data are available, Zurich was the most expensive for expatriates among the five cities, followed by Singapore, Tokyo, London and Hong Kong. These results pertain to the cost of living for expatriates, and cities compare very differently in terms of cost of living for ordinary residents, as ordinary residents follow different consumption patterns from expatriates. Originality/value Cost of living in the destination city is a major consideration for professionals who look to relocate, and organisations factor such calculations in their decisions to post employees overseas and design commensurate compensation packages. This paper develops a comprehensive and rigorous methodology for measuring and comparing cost of living for expatriates around the world. The value-addition lies in the fact that the authors are able to differentiate between expatriates and ordinary residents, which has not been done in the existing literature. They use higher quality data and generate an index that is not sensitive to the choice of base city.

scholarly journals The effect of GST announcement on stock market volatility: evidence from intraday data

2019 ◽  
Vol 16 (3) ◽  
pp. 313-328
Author(s):  
Razali Haron ◽  
Salami Mansurat Ayojimi
Keyword(s):  
Stock Market ◽  
Global Financial Crisis ◽  
Market Volatility ◽  
Stock Market Volatility ◽  
Cost Of Living ◽  
Empirical Estimation ◽  
Content Type ◽  
Goods And Services ◽  
Intraday Data ◽  
The Cost

Purpose The purpose of this paper is to examine the effect of GST announcements (pre and post) on Malaysian stock market index. This study also utilised intraday data to look into intraday market volatility post-GST announcement. Design/methodology/approach Both daily closing prices and intraday data of different frequencies are used to capture the extent of stock market volatility as well as the subsided period of the volatility. The period of study ranges from June 2009 to November 2016 and empirical estimation is based on the GARCH (1, 1) model for the pre- and post-GST announcements. Findings Persistent market volatility in the post-GST announcement is empirically recorded and the volatility is higher in the post-GST announcement than the pre-GST announcement. This demonstrates the unwillingness and reaction of the market towards the tax policy implementation. Market expectation on GST implementation towards the increase in the cost of living following the increase in the prices of goods and services in Malaysia is empirically supported in the post-GST announcement. Practical implications The finding on this study is consistent with the expectation of the market that GST implementation will increase the price of the goods and services and hence increase the cost of living. This is supported by a noticeable increase in the stock market volatility in the post-GST announcement. Although GST announcement could be classified as a scheduled announcement, unwillingness to accept the policy prevails as shown by the increase in the stock market volatility. Originality/value The effects of Asian and global financial crisis are the major focus of past studies on stock market volatility, whereas this study examines and highlights the effect of the GST announcement on stock market volatility and the use of intraday data to further examine the nature of the volatility.

A Complete Picture of Spatial Disparity in Cost of Living Index: A Case Study of Pakistan’s Cities

2021 ◽  
Vol 5 (1) ◽  
pp. 47-66
Author(s):  
Farrukh Mahmood ◽  
Shumaila Hashim ◽  
Hina Fatima
Keyword(s):  
National Average ◽  
Spatial Disparity ◽  
Cost Of Living ◽  
Goods And Services ◽  
Specific Factors ◽  
Micro Level ◽  
The Cost ◽  
Cost Of Living Index ◽  
Province Level

This study constructed the cost of living index by using all available data on 488 commodities of the 40 cities of Pakistan for the month of May 2019. Empirically, results revealed that there is a statistical difference in the cost of living index among cities from the standard of living. Based on the national average prices, the Islamabad is ranked at first, and Mirpurkhas, a city of Sindh, is at fortieth. Furthermore, Province wise highest cost of living is found in NWFP and lowest in Sindh. By employing national average prices that have aggregation bias; therefore, it is replaced by province-level prices; the ranking among cities within the province is changed. At province average prices, the highest cost of living index is found in Rawalpindi, Karachi, Abbottabad, and Loralai, and the lowest cost of living in Gujranwala, Mirpurkhas, Peshawar and Turbat, for the province of Punjab, Sindh, NWFP, and Baluchistan, respectively. This spatial disparity in the cost of living is mainly due to specific factors of production in a specific city as compare to other; Quetta is known as “fruit garden in Pakistan,” and Khuzdar is an agriculture-based city. Similarly, Karachi and Lahore have (i) high per capita income, and (ii) over-population are the factors of the high cost of living. Hence, in the light of the present study, it is suggested there is no single rule through which disparity in the cost of living can be overcome. Preferably the solution is laying at the micro-level, i.e., the disparity in the cost of living is mainly due to disparity in prices of same goods and services across cities, therefore by controlling prices of goods and services across the cities will suppress this disparity.

The impact of labor freedom on geographic cost of living differentials

2017 ◽  
Vol 6 (3) ◽  
pp. 385-395
Author(s):  
Richard Cebula ◽  
James E. Payne ◽  
Donnie Horner ◽  
Robert Boylan
Keyword(s):  
Labor Market ◽  
State Level ◽  
The State ◽  
Annual Data ◽  
Significant Finding ◽  
Cost Of Living ◽  
Content Type ◽  
The Usa ◽  
The Cost ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of labor market freedom on state-level cost of living differentials in the USA using cross-sectional data for 2016 after allowing for the impacts of economic and quality of life factors. Design/methodology/approach The study uses two-stage least squares estimation controlling for factors contributing to cost of living differences across states. Findings The results reveal that an increase in labor market freedom reduces the overall cost of living. Research limitations/implications The study can be extended using panel data and alternative measures of labor market freedom. Practical implications In general, the finding that less intrusive government and greater labor freedom are associated with a reduced cost of living should not be surprising. This is because less government intrusion and greater labor freedom both inherently allow markets to be more efficient in the rationalization of and interplay with forces of supply and demand. Social implications The findings of this and future related studies could prove very useful to policy makers and entrepreneurs, as well as small business owners and public corporations of all sizes – particularly those considering either location in, relocation to, or expansion into other markets within the USA. Furthermore, the potential benefits of the National Right-to-Work Law currently under consideration in Congress could add cost of living reductions to the debate. Originality/value The authors extend the literature on cost of living differentials by investigating whether higher amounts of state-level labor market freedom act to reduce the states’ cost of living using the most recent annual data available (2016). That labor freedom has a systemic efficiency impact on the state-level cost of living is a significant finding. In our opinion, it is likely that labor market freedom is increasing the efficiency of labor market transactions in the production and distribution of goods and services, and acts to reduce the cost of living in states. In addition, unlike previous related studies, the authors investigate the impact of not only overall labor market freedom on the state-level cost of living, but also how the three sub-indices of labor market freedom, as identified and measured by Stansel et al. (2014, 2015), impact the cost of living state by state.

Rationing and the Cost of Living Index

1941 ◽  
Vol 8 (3) ◽  
pp. 185-187 ◽  
Author(s):  
N. Kaldor
Keyword(s):  
Cost Of Living ◽  
The Cost ◽  
Cost Of Living Index

scholarly journals The Cost-of-Living Index and Wage Determination

2014 ◽  
Vol 4 (5) ◽  
pp. 41-42
Author(s):  
Jean-Marie Martin
Keyword(s):  
Wage Determination ◽  
Cost Of Living ◽  
The Cost ◽  
Cost Of Living Index

To what extent can the cost of living index be used in the negotiation of wage agreements ?

The theory of the cost-of-living index

1991 ◽  
Vol 7 (2) ◽  
pp. 234-240
Author(s):  
Bert M. Balk
Keyword(s):  
Cost Of Living ◽  
The Cost ◽  
Cost Of Living Index

scholarly journals Approximating the Cost-of-Living Index for a Storable Good

2018 ◽  
Vol 10 (2) ◽  
pp. 286-314 ◽  
Author(s):  
Matthew Osborne
Keyword(s):  
Regime Shift ◽  
Structural Model ◽  
Regime Shifts ◽  
Cost Of Living ◽  
Product Categories ◽  
Dynamic Structural Model ◽  
Fixed Base ◽  
Retail Prices ◽  
The Cost ◽  
Cost Of Living Index

This paper estimates a cost-of-living index using a dynamic structural model for two storable product categories. In each category, regime shifts to higher or lower retail prices are observed. Fixed-base indexes do a poor job of capturing changes in welfare after a regime shift, and deviate from the dynamic index by as much as 300 percent. I evaluate the extent to which two recently proposed indexes can approximate the model-derived index. These indexes improve welfare measurement and are straightforward to compute. The category’s competitive structure and features of the regime shift determine which of the two provides a better approximation. (JEL C43, C51, E31, L11)

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