Out of the Frying Pan and Into the Fire

Mercer published a new list of the most expensive cities in the world. Mercer is to expensive cities as Forbes is to rich people or that Mr. Blackwell guy is to fashionable celebrities. Here are some of the top contenders for 2005.

1 Tokyo

2 Osaka

3 London
4 Moscow
5...6...7...8...9...

13 New York City
15 St. Petersburg, Russia

My previous rationale for this statistic when talking about Moscow was to put the data into context. Mercer is looking at common prices for expat packages, with certain standards of quality, size, etc. For example, the price in Moscow for a European-renovated apartment that would be comparable to living arrangements in Paris, or NYC, or London, etc. That sort of apartment is in pretty short supply in Moscow - so they tend to be very expensive. In effect, the normal standard of living measured by Mercer is actually available to only the richest class in Moscow, and the premium pricing shouldn't be any surprise. Overall, the supply/demand imbalance is really a distortion of the true price structure of a city.

As noted, that was my previous rationale. A rationale that disappeared in a small puff of white smoke when my landlord submitted the paperwork to convert my rental apartment to condo. The initial offer to sell to me values my apartment at $2000 per square foot. With a top-end at $2500 per square foot.

The rationale that replaced the old one is not very encouraging. Its a realization that I evidently enjoy living in exactly those places that are in the crux of the imbalance. So what if Moscow is overly inflated for purposes of the Mercer list? I'm going to be living in the very midst of that exact neighborhood. Just as I apparently live in the midst of one here.

Stupid well-developed sense of entitlement.

So just look at the faulty nature of my logic if reflected on my situation at home. Sure, I'd say, way out in Brooklyn is much cheaper since it doesn't fall prey to the supply/demand problems and premiums associated with living in Manhattan. The apparent cost of living in New York, therefore, is inflated by this distortion. But I didn't choose to live in way-out Brooklyn. I chose to live on 57th Street in Manhattan. While there may very well be distortion in true prices, it definitely defines my reality.

And will likely continue to define my reality even in Moscow.

The truth is I don't have to worry too much. The fellowship is picking up living expenses and providing a very generous stipend. I just have to not pretend to be a billionaire oil baron, and I should be alright.