Cost of Living Methodology

Overview

CompareCityCosts provides modelled cost-of-living estimates to help users understand relative affordability across global cities. Our approach combines official economic data, international price metrics, and structured adjustment models to create consistent, comparable estimates.

1. Data Sources

• OECD ? Consumer Price Index (CPI) by category.
• World Bank ? Purchasing Power Parity (PPP) and price level indices.
• National statistical agencies ? Country-level inflation and household data (where available).
• OpenStreetMap/Nominatim ? City metadata and geodata for resolving local boundaries.
• United Nations ? Population and urbanisation datasets for classification.

We rely on open data from these agencies and combine it with proprietary modelling heuristics; every data point is attributed to its source.

2. Core Modelling Approach

2.1 Comparative Price Levels (CPL)

CPL provides relative cost differences between countries and lays the foundation for our cross-border comparison model.

2.2 PPP (Purchasing Power Parity)

PPP normalises purchasing power differences across currencies to make basket comparisons meaningful.

2.3 CPI (Consumer Price Index)

CPI is used to adjust estimates for inflation and trending costs over time.

2.4 London Baseline Model

We anchor all estimates to a high-confidence baseline: London ? Standard Single, with detailed category baselines (housing, food, utilities, transport, entertainment, healthcare). Each city?s estimate is derived by applying relative CPL/PPP/CPI adjustments to this baseline.

3. City-Level Adjustments

3.1 Global Tier Classification

• Tier 1 ? Global capital.
• Tier 2 ? Regional hub.
• Tier 3 ? National average.

3.2 Intra-Country Scaling

Structured, rule-based adjustments account for capitals, secondary hubs, tourist destinations, regional, and smaller cities. Deterministic micro-offsets (?1%) avoid identical values while preserving category ordering.

3.3 Climate-Based Utilities Model

Utility costs adjust with heating and cooling needs derived from climate zone data.

4. Personas & Lifestyles

Personas: Single, Couple, Couple with Two Children. Lifestyles: Frugal, Standard, Comfortable, Luxury. Costs scale via structured multipliers applied to category-level baselines.

5. AI-Generated Descriptions

City descriptions, intros, and lifestyle summaries may be generated or refined using AI, relying on non-personal city metadata. This content is illustrative and narrative in nature.

6. Limitations

The model does not use real-time rental listings, grocery prices, local micro-surveys, or card transaction data. Values are not local market prices; every figure should be treated as a comparative estimate, not literal ground truth.

7. Intended Use

Intended for high-level affordability comparison, relocation research, curiosity, and cost benchmarking. Not intended for budgeting, salary negotiation, visa/financial decisions, or contractual agreements.

8. Legal context

This methodology should be read together with our Legal Disclaimer. Data is attributed to OECD, World Bank, UN, national statistical agencies, and OpenStreetMap, and is used under their open data terms.

9. Contact

For methodology questions: legal@comparecitycosts.com