Many people often daydream about living in another country, perhaps on a tropical island or maybe in an idyllic villa in Europe, either to get away from their mundane lives or to retire somewhere more affordable. But how much does it actually cost annually to live in different countries around the world?
To find out, I gathered cost of living data from Numbeo, supplemented with data from Expatistan as needed. This data consisted of ratios comparing the cost of living in each country (including housing, food, transportation, utilities, etc.) to the cost of living in New York City. I then used MIT’s living wage calculator to determine the minimum annual cost of living in New York City for an individual, a couple where both work, a family of three with two adults (one working) and one child, and a family of four with two working parents and two children. You can see those values and a comparison with the U.S. as a whole here:
|1 Adult||2 Adults||2 Adults (1 working)|
|2 Adults (both working)|
|Annual Cost of Living |
in New York City
|Annual Cost of Living |
in the U.S.
I then multiplied those values by the ratios for each country to determine the annual cost of living around the world, which you can see in the following geographical heat map or in the Excel data sheet provided at the end of the article.
Annual Household Cost Of Living Around The World
Out of the 230 countries, territories, and regions that I have data for, the cost of living in the U.S. ranks 57th. Cost of living tends to be highest in Oceania, Western and Northern Europe, the U.S. and Canada, and Central Africa. It tends to be lowest in Latin America, Asia, Eastern Europe, and Northern Africa. Most places appear to be at the lower end of the cost of living spectrum, which can be seen more easily in the following histogram:
The histogram clearly shows that cost of living has an uneven distribution, with most regions clustered at the lower end. Indeed, the cost of living in the majority of regions is less than $30k per year for a family of three. About 25% of regions have a cost of living under $20k. 75% have a cost of living under $40k.
The most expensive areas to live, in order, are Bermuda, Greenland, North Korea, the Falkland Islands, Switzerland, Gibraltar, the Cayman Islands, Monaco, and Liechtenstein. These locations are all over 50% more expensive to live in than the U.S., with the annual cost of living for a family of three ranging from $64k to $86k. The least expensive areas to live, with a cost of living under $10k for a family of three, are Pakistan, Venezuela, and Sudan.
Local Purchasing Power By Country
Cost of living can give us a good sense of how much goods and services cost around the world, and thus, how expensive it would be to live abroad. However, this only really applies in the context of someone from one country planning to live in another country. It does not tell us anything about what residents of each country can actually afford. To determine that, we need to calculate local purchasing power, which takes into account the local average salary. Helpfully, Numbeo has already done this calculation for us for a large number of countries, and this data is displayed in the following geographical heat map.
Keep in mind that the local purchasing power calculated by Numbeo is relative to residents of New York City making the average salary, so the displayed values are the percentages of goods and services that an average resident of a country can purchase compared to an average resident of New York City.
As you can see, local purchasing power is the highest in Western and Northern Europe, the U.S. and Canada, and Oceania. It is the lowest in Southeast Asia, Africa, and Latin America. Local purchasing power is at two extremes in the Middle East, with Qatar, Saudi Arabia, the United Arab Emirates, and Oman at the high end and Syria, Yemen, and Iran close to the bottom.
U.S. residents as a whole actually have slightly higher purchasing power than residents of New York City (103, or the ability to afford 103% of what an average New York City resident can). The only other country with a higher local purchasing power is Switzerland at 111. Right below Switzerland and the U.S. are Australia, Luxembourg, Denmark, Germany, Qatar, and Sweden, which all have a local purchasing power between 90 and 100. At the bottom of the list with a local purchasing power below 10 are Nigeria, Syria, Ivory Coast, and Cuba. Average residents of Cuba can only afford 1% of what an average New York City resident can purchase.
For anyone interested in the annual household cost of living or local purchasing power of various regions around the world, I am providing the data I used to generate the heat maps in the following Excel file: