EIU CityData

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DATABASE

EIU CityData

DATA PROVIDER

The Economist Intelligence Unit

DESCRIPTION

EIU CityData contains pricing information on over 160 products and services in 123 cities worldwide. Items range from the cost of a loaf of bread to the average electricity bill of a local family, from the cost of office rents to median salary levels. EIU CityData provides the most complete picture of global price levels you can find.

The vast majority of prices are gathered by EIU correspondents located in the cities themselves. Prices are collected from two types of store -- supermarkets and medium-priced retailers. Only outlets where items of internationally comparable quality are available for normal sale are visited.

For certain items, such as monthly rent of residential properties and clothing, there are many subjective factors, such as personal preference, at play, as well as a wide variety of choice. Therefore, the price data given for certain items should be considered as an indication of the general level of prices in these categories, although all data are based on actual prices noted by our researchers.

A small number of series in EIU CityData are derived from other sources. Office rental costs come from Global Market Rents, a biennial survey conducted by CB Richard Ellis/CB Hillier Parker, and industrial rents are from Healey & Baker's Business Space Across the World report. Benchmark salary levels are provided for selected countries from Watson Wyatt, a human resources consultancy. Disposable income levels are provided by TaxDisc software, and are calculated by removing standard income tax and social security contributions. And series on national consumer price inflation and unit labour costs are derived from EIU CountryData, the EIU's database of global economic indicators and forecasts.

Every effort is made to collect prices for every item in every city. However, in certain locations, the quality and range of the goods available means that they are not internationally comparable, and in others, goods are simply not available at all (alcohol in Muslim countries is an obvious example). City coverage of office rents, industrial rents, benchmark salaries and disposable income levels are determined by the providers of these series.

The prices surveyed by the EIU are updated twice a year. The fieldwork is carried out by our researchers in the first week of March for the mid-year update of the prices, and in the first week of September for the end-year update. For all previous years in the database, therefore, the figures shown are end-year prices, while for the current year, the figure will be that from the most recent survey. For the early part of the current year, the prices shown will match the prices from the previous year because they are derived from the same survey. Series taken from EIU CountryData are updated on a monthly basis.

EIU CityData contains over 330 price levels, broken down into the following categories and including the following goods and services:

National consumer price inflation: Average inflation rate and consumer price index.

Food: Bread, flour, cheese, fresh fruit and vegetables, canned food, meat, fish and non-alcoholic beverages.

Alcohol: Wine, beer, whisky, gin and brandy.

Household supplies: Soap, dishwashing liquid, light bulbs, toaster and laundry charges.

Personal care: Aspirins, razor blades, toothpaste, shampoo and hairdressing charges.

Tobacco: Western-brand cigarettes, local cigarettes and pipe tobacco.

Utilities: Telephone rental and call charge, average gas bill, average electricity bill and average water bill.

Clothing: Men's business suit and shoes, women's dress and shoes, and child's jeans and shoes.

Domestic help: Domestic cleaning rates and babysitting costs.

Recreation: Compact disc album, colour TV, foreign and local newspapers, three-course dinner and cinema and theatre seats.

Transport: Compact car, family car, luxury car, road tax, car insurance and taxi charges.

Office and residential rents: Office rent in US dollars and euros, industrial rents, and rents for a range of furnished and unfurnished apartments and houses.

International schools, health and sports: Tuition fees at international schools, medical checkup, golf course fees, and tennis court hire.

Business trip costs: Typical daily cost of a business trip, hotel charge, hire car cost and meal prices.

Salaries and disposable income: Median salaries for a sales manager and bilingual secretary, labour costs per hour, and disposable incomes as a percentage of gross salary for single people, married people and people with children.

Why do the prices of some goods seem to fluctuate so violently from year to year?

There are a number of explanations for the volatility of prices in the survey. Among the most common are:

• The inflation rate. Hyperinflation can mean prices increase dramatically within a city between surveys. Equally deflation means prices may drop, sometimes significantly. Remember too that inflation can hit some items much harder than others, especially in heavily regulated economies where the prices of the most sensitive products and services are capped.

• Exchange rate / imports. Many of the goods included in EIU CityData are imported products. If the local currency changes dramatically against the currency of the exporting country, the prices change too. As a result, imported clothing prices may have escalated by 200-300% while locally produced staples such as flour or rice may have increased by just 10%.

• Local shortages. Drought, flood, failed harvests, local disasters, panic buying and civil unrest-all affect local availability and prices. Some shortages are short-lived, others take longer to recover from. Availability fluctuates in any city but can be acute in developing countries. Prices found from one survey to the next will be more erratic where availability is a problem (eg Chinese cities).

• Political events. Governments may decide to ban imports or discourage locals from buying a certain country's items (for example, in the mid-1990s a "buy British last" campaign was instigated in Malaysia). Equally pressure groups may act to persuade people to boycott products originating from certain countries.

• New sources of products and services. New stores opening up can force prices down as they increase competition (this happened in Honolulu when the large US discount stores set up shop). Conversely average prices may "rise" when improved access to high-quality imports is made possible by international stores entering new markets (take Jakarta in the early 1990s, when a well-known regional store opened in the Indonesian capital with an impressive range of imported items). This factor also applies to schools and accommodation -- especially in developing markets as new residential blocks and associated facilities are built (as seen in Ho Chi Minh City and Hanoi in the 1990s, for instance). In a similar phenomenon, new models or brands entering the global market can push prices upwards as they become the "must-have" or norm -- for example, razor prices increased globally when Gillette introduced the Mach 3.

• Seasonal fluctuations. The prices of fresh fruit, vegetables and meat are all subject to seasonal variations. So too are hire car prices and hotel rates.

• Package size. Generally the larger the pack size the lower the unit cost. Correspondents collecting prices for EIU CityData survey the most common local size from one survey to the next. However, markets change and new sizes are introduced, with implications for price levels.

• Prices denominated in foreign currency. In some countries goods or services may be paid for in a foreign currency. EIU CityData converts these prices into local currency at the exchange rate prevailing at the time of survey. For example, international school fees are often quoted in the relevant national currency (eg French school, French francs). In countries where the currency (and the economy) is particularly volatile, prices may be listed in US dollars one year and local currency the next (eg Moscow through the 1990s).

• Opening up of markets and deregulation. As governments welcome foreign investment and open up their markets to international companies, so the variety and availability of imported products improves. Deregulation and liberalisation is another factor affecting price levels: to take an obvious example, communication costs have fallen as telecoms industries throughout the world have gradually been deregulated.

Taxation. Products such as alcohol, cigarettes and petrol are subject to taxation, the levels of which can change quite dramatically from year to year.