Each year, Mercer Consulting assembles its ranking of the most expensive places to live to help multinational corporations determine compensation allowances for expatriate employees, using New York as the base reference city. Mercer compiles information from 214 cities worldwide, comparing the cost of more than 200 items in each location, including housing, transportation, food, entertainment, and more.
“The world witnessed an incredible number of natural disasters and political upheavals that have all affected the lives of expatriate employees to some extent. Currency fluctuations and the impact of inflation on goods and services–petroleum in particular–have led to some reorganization of the ranking," says Nathalie Constantin-Metral, the senior researcher at Mercer who compiled the study. “In North America, increasing petroleum prices continue to contribute to rising consumer prices, but many of its cities dropped in the rankings as price increases in other regions have been more severe, pushing U.S. cities down the list," she says.
In North America, the most expensive city is New York (32), while Toronto (59), Vancouver (65), Los Angeles (77), and Montreal (79) round out the most expensive cities on the continent. In these areas, as well in other regions around the world, accommodation prices continue to be the biggest drivers in cost of living, with rental demand and prices rising in the U.S., according to Mercer.