Friday, 10 January 2014

Is it really that much more expensive to live in London versus Los Angeles?

An interesting project has been popping up on my news feed today. It's a new tool from expatistan comparing the cost of living in different cities (mainly from the perspective of the footloose professional class).

Comparing the two cities I've lived in most recently gave an interesting result:

The site says that it's designed as a tool to help you decide between different job offers around the world. You know your potential salaries and want to know which will give you a better standard of living. 

The standout category in this comparison is transportation with Los Angeles 54% cheaper than London. 

This is calculated by taking the average percentage difference to buy a:
  • Volkswagen Golf 2.0 TDI 140 CV 6 vel. (or equivalent), with no extras, new
  • 1 liter (1/4 gallon) of gas
  • Monthly ticket public transport
  • Taxi trip on a business day, basic tariff, 8 Km. (5 miles)

The car in London is actually 10% cheaper than in Los Angeles. However, London's petrol/gas is 55% more expensive. This is a fair point and reflects the much higher fuel tax in the UK. 

However, the monthly ticket on public transport is where the difference really kicks in. LA's monthly ticket comes out as the equivalent of £41 compared with £127 for London's. 

But that difference isn't the arbitrary choice of Transport for London. It actually represents the best reason to prefer London to LA. In most of London you can take public transport anywhere in fairly little time. Spending £127 means that you don't need to buy a Volkswagen Golf or a liter of gas at all. It's rarely worth owning a car if you live in central London. 

In LA, public transport is simply not a substitute for car ownership. The £41 doesn't pay for anywhere near as much transport in LA. 

And that's not even getting into the largest single expense for many US household: healthcare. 

1 comment: