This post is Part 2 of a two-part series, where we explore the Cost of Living in Dubai…
We all know that Dubai can be an expensive city to live in. But just how does the cost of living in Dubai compare to other large cities around the world?
Fortunately, there’s some great data that already exists that we can use to pull some key insights from. We’ll take a look at the most recent Cost of Living Index Rankings from Expatistan, Mercer, The Economist Intelligence Unit and Numbeo.
On this page, you can explore an analysis done on the Cost of Living Index Rankings from Expatistan, Mercer and The Economist Intelligence Unit. (I excluded Numbeo from the analysis because it seems like such an outlier … ranking Dubai as less expensive than the tiny town of Akron, Ohio!) You can see that I’ve calculated a weighted average of the Cost of Living Index Rankings and then re-sorted and ranked all the cities based on their average cost of living.
The result of this analysis is that Dubai is the 34th most expensive city to live in anywhere in the world. More expensive than Rome, Miami and Kuala Lumpur. Less expensive than London, New York and Singapore. Makes sense to me! What do you think?
Check out this infographic, and then dig into some more of the details below. Enjoy!
But quickly, before we look at each of the surveys …
What are some of the drivers of the relative Cost of Living in any city?
- The average cost of daily-living items (influenced by supply/demand and sourcing)
- The supply and demand of housing
- The unemployment rate
- The “magnet effect” of the key industries operating in the vicinity
- The strength of the national currency
- Taxes for residents
Now, on to the survey results!
Dubai’s Cost of Living rank is 49 out of 323 cities in the world.
Cost of living index in Dubai is 28% lower than New York City and 22% lower than in London.
Dubai has some of the most expensive alcohol in the world, but also some of the cheapest public transportation anywhere.
Explore this page for an item-by-item average price analysis.
Also check out this page for a city-to-city price comparison on an item-by-item basis.
Expenses of a “typical expat” is divided into 6 groups: Food, Housing, Clothes, Transportation, Health, Entertainment.
Website users enter the prices, in a collaborative manner, for each of these products, in all the cities available.
In general, the more prices entered for a city, the more accurate comparisons will be.
Our statistical model aggregates and models all prices entered, removing erroneous and malicious entries in the process … producing an average for the price, and a reliability signal indicating data quality.
Prices are converted to a common currency, weighted across spending categories and the Cost of Living index is recalculated daily based on average price differences.
For Dubai … “These prices are based on abundant and consistent data. They are very reliable. They are based on 3,873 prices entered by 830 different people. Latest price update: October 17, 2017.”
Dubai’s Cost of Living rank is 19 out of 209 cities in the world.
More expensive than San Francisco, but less expensive than Tokyo.
The survey covers 209 cities across five continents.
Measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
New York City is used as the base city, and all cities are compared against it.
Currency movements are measured against the US Dollar.
Governments and major companies use data from this survey to protect the purchasing power of their employees when transferred abroad and to assess local expatriate housing allowances.
The Economist Intelligence Unit
Dubai’s Cost of Living rank is 64 out of 133 cities in the world.
More expensive than Mexico City, but less expensive than Boston.
Compares more than 50,000 individual prices across 160 types of goods and services.
Prices gathered from a range of stores: supermarkets, mid-priced stores, and higher-priced specialty outlets.
Prices recorded are not the recommended retail prices or manufacturers’ costs … they are what the paying customer is charged.
Items surveyed are identical for all countries and not geared toward the spending pattern of any specific nationality.
Prices are converted to a common currency, weighted across spending categories and the Cost of Living index is calculated based on average price differences.
The survey is conducted each March & September and published in June & December.
Results are primarily used by HR managers to calculate compensation packages for overseas postings.
Dubai’s Cost of Living rank is 206 out of 511 cities in the world.
Cost of living index in Dubai is 27.86% lower than New York City and 19.05% lower than in London.
A four-person family monthly costs are 11,347.84AED excluding rent.
A single person monthly costs are 3,257.11AED excluding rent.
Explore this page for an item-by-item average price analysis.
Also check out this page for a great summary of relative rankings to other cities on an item-by-item basis.
The Cost of Living Index (excluding Rent/Mortgage) is a relative indicator of consumer goods prices, including groceries, restaurants, transportation, and utilities.
The Index is relative to New York City.
Calculated based on website user inputs and manually collected data from authoritative sources.
An algorithm is in place to filter unreasonable prices and an average price is calculated with lowest and highest prices also displayed.
Prices are weighted across categories and the Cost of Living index is calculated based on average price differences.
For Dubai … “These data are based on 6252 entries in the past 12 months from 691 different contributors. Last update: October 2017.”
What do you think of these rankings? Do they line up with your personal experience in Dubai and other cities around the world?
As always, check out these additional resources below…
Further Reading & References
Cost of Living Index Surveys & Rankings
Matt Nobles is the founder of Dubai Personal Finance. In addition to being a certified Personal Finance Education Instructor, Matt also has 10 years of Corporate Finance experience, working for a large multi-national company. Matt is passionate about helping people like you learn how to make wise money management choices, so you can achieve Financial Independence and focus on living the life you’ve always wanted.
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(Disclaimer: This article contains information for your reference and explains options you may have, but it is not intended to be specific advice or a personal recommendation. DubaiPersonalFinance.com exists to provide general guidance and education, but your situation may vary from the one discussed here, so please seek a licensed professional for tax, legal, financial planning or investment advice.)
Please let me know what you think of this post. Where do you agree and disagree? Comment below!