# Methodology

Source: https://cost-of-life.com/methodology

## What the cost engine does

Raw prices are not comparable across cities. A monthly rent, a per-kilometre taxi fare and an annual
school fee are three different units. So we do not publish a price index: we take a household
specification — adults, children, housing choice, lifestyle level, car, childcare, private healthcare —
and convert every raw price into a monthly amount for that household.

Key assumptions:

- Children count as 0.6 of an adult for food and consumables.
- A flatshare room is priced at 55% of a one-bedroom outside the centre.
- A car assumes 900 km/month at 7.5 L/100km, plus insurance, servicing and parking scaled from a New York baseline by the local price level.
- Health cover is charged whether or not it is requested in the four countries where it is not optional (Germany, Switzerland, Netherlands, United States).
- Where a city has no usable transit network, a scooter is priced instead.

Every line on a city page states the assumption that produced it.

## The cost index

Not a fixed basket. It is the cost of the specified household in the given city divided by the cost of
the same household in New York, times 100. Change the household and every index changes with it.

## Tax models

45 country models. Each has a personal allowance or standard deduction, a
progressive bracket table in the local currency, and employee social contributions with their ceilings.
Sub-national tax (US states, Canadian provinces) is applied as a flat approximation of the local
effective rate. Surtaxes that sit on top of computed tax are modelled explicitly, as is Hong Kong's
standard-rate cap.

Salaries are converted into the taxing country's own currency, taxed there, and converted back.

**Limits:** estimates for a single filer with no dependants, no itemised deductions and no employer
benefits. Joint filing, family quotients, expat regimes and equity compensation all move the real
number. Not tax advice.

## Data sources

- World Bank ICP price-level and PPP indicators
- OECD prices and purchasing power parities
- Eurostat household expenditure and housing statistics
- National revenue authorities for every bracket table
- Municipal and operator tariffs for transit, utilities and connectivity
- Open-Meteo historical climate archive (twelve monthly normals per city, three-year average)
- ECB reference rates for currency conversion, snapshot 2026-10-25

Seed values are modelled estimates compiled for cross-city comparison. They are appropriate for
deciding between cities. They are not a quote for a specific property.

## Coverage

70 cities, 45 countries.

## How to cite a figure

State the household it was priced for and the review date shown on the page. The same city produces
very different numbers for one adult in a flatshare and a family of four with childcare.